Brazil is reportedly considering imposing taxes on cryptocurrencies used for international payments. This potential move is part of the country’s broader strategy to address regulatory gaps, conform to international tax reporting standards, and potentially boost public revenue.
The Federal Revenue Service of Brazil recently indicated its intention to harmonize its crypto-asset transaction reporting procedures with global tax frameworks.
Brazil Explores Expansion of Financial Transaction Tax to Cryptocurrencies
According to an exclusive report from Reuters, citing anonymous officials with direct knowledge of the ongoing discussions, Brazil is contemplating the introduction of taxes on the utilization of cryptocurrencies for cross-border payments. These sources indicated that the government aims to close existing loopholes within its current levy on foreign-exchange transactions.
The Brazilian Finance Ministry is reportedly examining the possibility of extending the Imposto sobre Operações Financeiras (IOF)—a federal tax applicable to financial operations such as foreign exchange, credit, and insurance—to encompass certain international transfers executed using digital assets, including stablecoins.
Earlier this month, the Brazilian central bank published long-awaited regulations governing the trading of virtual assets, including cryptocurrencies. This new regulatory framework extends existing anti-money-laundering regulations to virtual-asset service providers. Under these new rules, any transaction involving the sale, purchase, or exchange of virtual assets that are pegged to fiat currencies, such as stablecoins, will be officially classified as a foreign-exchange transaction.
Currently, cryptocurrencies are exempt from the IOF tax. However, investors are still subject to a flat 17.5% rate on capital gains derived from crypto-assets. The central bank's new regulations are scheduled to take effect in February 2027.
Sources cited by Reuters suggested that the proposed tax adjustments are intended not only to close existing loopholes in Brazil's current financial framework but also to augment government revenue. Cryptocurrencies that are exempt from the IOF, particularly stablecoins, are frequently employed as alternatives to traditional foreign exchange, thereby circumventing the taxes typically applied to such transactions.
The new regulations are designed to "ensure that the use of stablecoins does not create regulatory arbitrage vis-à-vis the traditional foreign-exchange market," one source informed Reuters.
Brazil Enhances Reporting Rules to Align with CARF Standards
This development follows closely on the heels of an announcement by Brazil’s Federal Revenue Service stating that it will align its reporting requirements for crypto-asset transactions with the global Crypto-Asset Reporting Framework (CARF). This alignment is expected to provide Brazilian authorities with access to information regarding citizens' offshore crypto accounts.
The news emerges shortly after reports indicated that the White House is reviewing a proposal from the Internal Revenue Service (IRS) to join CARF as well.