Quick Summary
- Brazil is reportedly considering a tax on cryptocurrency usage for international payments.
- This potential tax aligns with Brazil’s adoption of the global Crypto-Asset Reporting Framework (CARF).
- The move aims to close perceived loopholes where digital assets bypass taxes applied to traditional foreign exchange transactions.
- Brazil’s Federal Revenue Service is updating its crypto reporting rules to mirror the international CARF standard.
- This development follows similar reviews and agreements by other nations, including the United States and the European Union, to implement CARF.
Brazil Considers Tax on Crypto Cross-Border Payments
Brazil is reportedly exploring the implementation of a tax on the use of cryptocurrencies for international payments. This initiative comes as the nation prepares to adopt the global Crypto-Asset Reporting Framework (CARF), a move that will enhance tax data exchange internationally.
Cited by a Reuters report, officials with direct knowledge of the ongoing discussions indicated that the Brazilian government is looking to levy taxes on cryptocurrency transactions that cross international borders. This potential tax is part of broader efforts to modernize and align Brazil’s financial regulations with global standards.
During closed-door discussions, representatives from Brazil’s Ministry of Finance are said to have expressed interest in extending the Imposto sobre Operações Financeiras (IOF) tax. This tax, which currently applies to financial transactions, could be broadened to encompass certain cross-border transactions involving digital assets.
The Federal Revenue Service of Brazil announced recently that its regulations concerning crypto-asset transactions will be brought in line with the OECD’s CARF. This legal update, effective from November 14, 2025, will enable the tax department to access citizens’ foreign crypto account data through the CARF’s international data-sharing mechanism. Brazil’s commitment to CARF was further solidified when it signed a statement endorsing the framework in late 2023.
This move by Brazil mirrors actions taken by other major economies. Reports from Monday indicated that the White House is reviewing a proposal for the Internal Revenue Service to join CARF. Additionally, the Council of the European Union has also been reported to be considering a similar alignment. In September, the United Arab Emirates formally agreed to join the CARF data-sharing program.
Brazil Seeks to Close Crypto Tax Loophole
Currently, cryptocurrencies are exempt from the IOF tax in Brazil. However, capital gains derived from crypto assets are subject to a flat tax rate of 17.5%. The IOF is a federal tax applied primarily to foreign exchange, credit, insurance, and securities operations.
Sources familiar with the internal discussions highlighted that the proposed tax aims to address a perceived loophole and increase government revenue. The exemption of digital assets from the IOF is seen as a loophole, particularly because assets like stablecoins can function as quasi-foreign exchange instruments or payment rails, thereby avoiding the taxes associated with conventional methods.
Officials emphasized that the new regulations are designed to prevent the use of stablecoins from creating regulatory arbitrage in contrast to the traditional foreign-exchange market, ensuring a more level playing field for all financial transactions.
Further Regulatory Efforts in Brazil’s Crypto Space
This potential tax adjustment is consistent with recent regulatory actions by the Brazilian Central Bank. Earlier this month, the central bank introduced new rules that classify certain stablecoin and cryptocurrency wallet operations as foreign exchange transactions. These updated regulations extend existing requirements for consumer protection, transparency, and Anti-Money Laundering (AML) to crypto brokers, custodians, and intermediaries.
In April, Brazilian courts received authorization to seize cryptocurrency assets from debtors, effectively closing another loophole related to asset recovery. A translated memo from the Superior Court of Justice stated that while crypto assets are not legal tender, they can serve as a method of payment and a store of value, making them eligible for seizure in debt collection cases.
Expert Summary
Brazil is moving towards taxing cryptocurrency usage in international payments as it adopts the global CARF framework. This initiative seeks to close tax loopholes and align digital asset regulations with traditional finance. The country is enhancing its crypto oversight through new rules on stablecoins and wallet operations, reflecting a broader international trend of increased crypto regulation.
