Brazil Narrows Crypto Tax Loopholes to Meet International Norms

Brazil is taking steps to impose taxes on the use of cryptocurrencies for international transactions, aiming to update its regulations in line with the global Crypto-Asset Reporting Framework (CARF) and address what it sees as a gap in its current tax system for financial transactions.

, the Brazilian authorities are weighing the possibility of extending the Imposto sobre Operações Financeiras (IOF)—a federal levy on financial activities—to cover certain cross-border transfers involving digital assets. This would represent a notable policy change, since cryptocurrencies are but do incur a flat 17.5% tax on capital gains.

This proposed taxation is part of Brazil’s broader initiative to align with the Organisation for Economic Co-operation and Development’s (OECD) CARF, which sets a worldwide standard for exchanging tax information related to crypto assets.

that its crypto transaction reporting guidelines will now comply with CARF, allowing authorities to access information on citizens’ overseas crypto holdings via the OECD’s data-sharing platform. This move follows Brazil’s adoption of CARF in late 2023 and is similar to steps taken by the United States, European Union, and United Arab Emirates.

The emphasis on international crypto payments highlights rising worries about stablecoins, which are increasingly being used as informal tools for currency exchange.

stablecoins as foreign exchange transactions, a regulatory update that enables the proposed tax changes. With in the first half of 2025 involving USDT—a stablecoin pegged to the US dollar—regulators believe this measure will help prevent regulatory loopholes and reduce the risk of money laundering.

The potential for increased tax revenue is considerable.

to 227 billion reais (about $42.8 billion) in the first half of 2025, marking a 20% rise compared to the previous year. While officials emphasize that the main objective is to address a regulatory shortfall, the new tax could also help strengthen Brazil’s finances during a period of fiscal strain. on the matter, citing the confidential status of ongoing talks.

On the international stage, both the U.S. and EU are progressing with CARF adoption. The White House is

to participate in the framework, which would require Americans to provide more detailed reports on their foreign crypto accounts. Meanwhile, the European Union Council and the UAE have pledged to implement CARF by 2028. These actions highlight a unified approach to tackling tax evasion in the crypto industry, where assets can be moved across borders with relative anonymity.

regulations on cryptocurrencies this year, broadening consumer protection and anti-money laundering measures to include crypto exchanges and custodians. In April, crypto assets from individuals with outstanding debts, further closing regulatory gaps. The latest tax proposal is part of this wider trend toward regulatory consolidation, as governments aim to bring digital assets under the umbrella of conventional financial oversight.