Congressional Committee Approves Amendments to Bill for Taxation of Cryptocurrencies in Brazil
A congressional committee in Brazil has approved amendments to a bill that aims to classify cryptocurrencies held in foreign exchanges as “financial assets” for taxation purposes. The legislation, which is set to increase taxes on cryptocurrencies held overseas, will be voted on by Brazil’s National Congress on August 28 and, if approved, will take effect in January 2024.
Key Points:
– The proposed legislation aims to establish equitable taxation by subjecting crypto assets held by Brazilians overseas to the same tax rules as traditional assets.
– Taxes will be levied on profits resulting from cryptocurrency price fluctuations compared to Brazilian reais and foreign exchange rates.
– Foreign income will be taxed at different rates: amounts up to 6,000 Brazilian reais will be tax-free, earnings from 6,000 to 50,000 reais will be subject to a 15% tax rate, and income exceeding this threshold will be taxed at a rate of 22.5%.
– The amendments will impact cryptocurrency exchanges that do not have physical offices in Brazil.
– The new law has the potential to attract foreign investment and incentivize foreign enterprises to set up offices within Brazil.
New Crypto Law in Brazil to Attract Foreign Investment
The proposed legislation in Brazil, if approved, aims to increase taxes on cryptocurrencies held overseas. The amendments aim to establish equitable taxation by subjecting crypto assets held by Brazilians overseas to the same tax rules as traditional assets. Taxes will be levied on profits resulting from cryptocurrency price fluctuations compared to Brazilian reais and foreign exchange rates. The new law has the potential to attract foreign investment and incentivize foreign enterprises to set up offices within Brazil to avoid high foreign income tax on crypto earnings.
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