The Brazilian Senate has approved new income tax regulations that may necessitate Brazilians to pay a maximum of 15% tax on earnings obtained from cryptocurrencies held on foreign exchanges.
The Brazilian Senate has approved new income tax regulations that may necessitate Brazilians to pay a maximum of 15% tax on earnings obtained from cryptocurrencies held on foreign exchanges. The bill, which has already received approval from the Chamber of Deputies, is anticipated to be sanctioned by President Luiz Inácio Lula da Silva, as the income tax modifications were initiated by his administration.
Commencing from January 1, 2024, individuals in Brazil earning more than $1,200 (6,000 Brazilian reals) from foreign-based exchanges will be subject to this tax. The tax rate for funds held on international exchanges will be equivalent to that applied to domestically held funds. However, earnings from funds accessed prior to December 31, 2023, will be taxed at 8%, while those accessed afterward will face the full 15% rate.
The legislation also impacts "exclusive funds," referring to investment funds with a sole shareholder, as well as foreign companies operating within Brazil's financial market. The government has set a revenue target of $4 billion (20.3 billion Brazilian reals) for these taxes in 2024.
Senator Rogério Marinho voiced his dissent towards the bill, criticizing the government for introducing a tax due to poor management.
This move to regulate and tax cryptocurrencies coincides with their increasing popularity in Brazil. In September, the governor of the Banco Central do Brazil outlined plans to tighten cryptocurrency regulations, citing concerns about potential tax evasion.
The Brazilian central bank was granted authority over virtual asset service providers earlier this year, while crypto-based securities are regulated by the Comissão de Valores Mobiliários, Brazil's equivalent of the United States Securities and Exchange Commission.
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