The buffer's coding system specifies the coding system used when reading the content from a file and when writing the content to a file. IOW, your "coding: utf-8" thingy only indicates how to decode the ASCII source string (which does not require any special decoding since it's ASCII, but that base64 string could be surrounded by non-ASCII text).
What you need is to call decode-coding-region
after having called base64-decode-region
.
Edit
Here are correspondent defuns:
(defun base64-decode-utf8-region (start end)
(interactive "r")
(save-restriction
(narrow-to-region start end)
(base64-decode-region (point-min) (point-max))
(decode-coding-region (point-min) (point-max) 'utf-8)))
(defun base64-encode-utf8-region (start end)
(interactive "r")
(save-restriction
(narrow-to-region start end)
(encode-coding-region (point-min) (point-max) 'utf-8)
(base64-encode-region (point-min) (point-max))))