Brazil Closes Crypto Tax Gap to Align with Global Standards

Brazil is moving to tax the use of cryptocurrencies for international payments, a step that aligns its regulatory framework with the global Crypto-Asset Reporting Framework (CARF) and aims to close a perceived loophole in its financial transaction tax regime. According to multiple sources, the Brazilian government is considering expanding the Imposto sobre Operações Financeiras (IOF), a federal tax on financial transactions, to include certain digital asset-based cross-border transfers. This would mark a significant shift, as cryptocurrencies are currently exempt from IOF but are subject to a 17.5% flat tax on capital gains.

The proposed tax aligns with Brazil's broader effort to integrate with the Organisation for Economic Co-operation and Development's (OECD) CARF, a global standard for sharing crypto-related tax data. Brazil's Federal Revenue Service announced on November 14 that its reporting rules for crypto transactions will now adhere to CARF, granting authorities access to citizens' foreign crypto account data through the OECD's data-sharing system. This follows Brazil's endorsement of CARF in late 2023 and mirrors similar moves by the United States, the European Union, and the United Arab Emirates.

The focus on cross-border crypto payments reflects growing concerns about stablecoins, which are increasingly used as a de facto foreign-exchange tool. Brazil's central bank recently classified stablecoins as forex operations, a regulatory shift that paves the way for the tax adjustment. With two-thirds of Brazil's crypto transaction volume in the first half of 2025 involving USDT-a dollar-backed stablecoin-authorities argue the move will prevent regulatory arbitrage and curb money laundering risks.

The potential revenue implications are substantial. Brazil's crypto market surged to 227 billion reais ($42.8 billion) in the first half of 2025, a 20% year-on-year increase. While officials stress that the primary goal is to close a regulatory gap, the tax could bolster public coffers at a time when Brazil faces fiscal challenges. The Finance Ministry, however, has not publicly commented on the proposal, citing the confidential nature of ongoing discussions.

Globally, the U.S. and EU are also advancing CARF integration. The White House is reviewing an IRS proposal to join the framework, which would require Americans to report foreign crypto account data more rigorously. Meanwhile, the Council of the European Union and the UAE have committed to CARF implementation by 2028. These developments underscore a coordinated effort to combat tax evasion in the crypto sector, where assets can be transferred pseudonymously across borders.

Brazil's central bank has further tightened crypto regulations this year, extending consumer protection and anti-money laundering rules to crypto brokers and custodians. In April, judges were authorized to seize cryptocurrency assets from debtors, another measure to close loopholes. The latest tax proposal fits into this broader trend of regulatory consolidation, as governments seek to bring digital assets under traditional financial oversight.