Brazil Proposes 30% Tax on Undeclared Cryptocurrencies as Senate Prepares Final Vote

Brazil Proposes 30% Tax On Undeclared Cryptocurrencies

Brazil could soon require citizens to pay a 30% levy on previously undeclared digital assets, as lawmakers push forward a new tax reform that targets hidden wealth.

The proposal, outlined in Bill 458/21, was approved by the National Congress on 29 October and is now awaiting a final vote in the Senate.

New Regime Allows Citizens To Regularise Hidden Assets

If passed, the legislation will introduce the Special Regime for Asset Update and Regularization (REARP), offering individuals the chance to declare undeclared or undervalued assets, from real estate to digital currencies such as Bitcoin.

Investors opting to comply will face a 30% charge, split evenly between tax and administrative penalty, calculated on the asset value as of 31 December 2024.

Payments can be made over 24 months, with interest tied to Brazil’s Selic rate, currently around 15% per year.

Those who participate will be exempt from prosecution for tax crimes, a legal protection that has attracted attention from the crypto community.

Crypto Market Growth Draws Government Attention

Brazil’s cryptocurrency sector has seen rapid growth.

A recent Chainalysis report shows transaction volumes reached R$1.7 trillion between mid-2024 and mid-2025, a 110% increase over 12 months.

Stablecoins have driven much of this growth, widely used for remittances, commercial payments, and corporate transactions.

Officials argue the tax reform provides clarity while also generating additional revenue, particularly as the government prepares its budget for 2026.

Political Debate Flares Over New Tax

The proposal has sparked political controversy.

Opposition lawmakers argue that it revives measures previously rejected.

Sóstenes Cavalcante and Gilson Marques criticised the plan as a “government expedient” aimed at raising funds, while supporters insist it is necessary to strengthen public finances.

The inclusion of elements from a withdrawn decree, which once aimed to generate R$20 billion, has added to the debate, drawing concern from investors and the wider crypto community.

Balancing Legal Clarity With Investor Costs

Beyond cryptocurrencies, REARP also allows taxpayers to update declared values of properties and vehicles at a reduced rate of 4%.

For the crypto sector, the legislation could mark a turning point: it offers legal certainty and protection from future investigations, but the 30% levy may discourage smaller investors from coming forward.

Brazil could become the first major Latin American country to formally integrate digital assets into its tax system, signalling a more regulated environment for the growing crypto market.

How Will Investors Respond To The 30% Levy

The new tax presents a dilemma for holders of undeclared digital assets.

Complying ensures protection and formal recognition of their holdings, but the combined tax and fine is substantial.

With the Senate vote pending, the decision will be closely watched by both domestic and international investors, who may reconsider their strategies in Brazil’s rapidly expanding crypto economy.