Brazilian legislators are making strides toward implementing new legislation that would heighten taxes on cryptocurrencies held outside the country. Reports from the nation indicate that a congressional committee has greenlit revisions to a bill that formally designates cryptocurrencies as “financial assets” for taxation purposes in the context of overseas investments.
Furthermore, this proposed bill seeks to levy taxes on gains stemming from fluctuations in cryptocurrency values concerning Brazil’s official fiat currency, along with alterations in foreign exchange rates. Congressman Merlong Solano has clarified that these modifications aim to establish a fair tax regimen, as current regulations allow overseas crypto investments to enjoy comparatively lower tax advantages.
The new amendments entail that earnings abroad, up to 6,000 Brazilian reais (roughly $1,200), would be exempt from taxation. Profits ranging between 6,000 and 50,000 reais (approximately $10,000) would be subject to a 15% tax rate, while amounts surpassing this threshold would incur taxes at a rate of 22.5%.
It’s important to note that these changes would specifically apply to cryptocurrency exchanges that lack a physical presence in Brazil. This adjustment could potentially render local exchanges a more economically viable option for select investors, particularly those who have accrued profits surpassing the highest tax bracket.
Crypto adoption in Brazil
Legal experts speculate that this legislation might boost cryptocurrency exchange activities within the country and could also serve as an incentive for foreign entities to establish their offices within Brazil.
Brazil is already home to several global cryptocurrency exchanges, including prominent names like Binance, Coinbase, Bitso, and Crypto.com. Alongside these international players, local platforms like Mercado Bitcoin and Foxbit also contribute to the nation’s crypto landscape.
The upcoming decision on this bill is scheduled for August 28th in Brazil’s Congress. Should it receive approval, the revised taxation regulations are slated to go into effect from January 2024 onward.
Source: https://www.cryptopolitan.com/brazil-unleashes-new-crypto-taxes/