Brazilian Senate Approves 15% Tax Rate for Crypto Profits on Overseas Platforms
Brazilian senators have voted in favor of a bill that proposes taxing crypto tax profits earned on overseas crypto platforms at a fixed rate of 15%. The bill was seriously amended to ensure no loopholes were included.
If the bill becomes law, users of international crypto exchanges such as Binance, Coinbase, and Kucoin will need to declare their earnings separately from other income and capital gains. The law is set to come into force on January 1, 2024.
Brazilian Crypto Traders Bracing for New Tax Bills
The amended bill replaces an initial proposal for a sliding scale-type structure. Under the initial proposal, those earning less than $1,200 from crypto trading on overseas platforms would have been exempt from taxation, while traders earning over $10,140 per year would have faced tax bills of over 22%.
The bill also classifies crypto wallets as overseas financial applications and grants regulatory powers to the Special Secretariat of the Federal Revenue of Brazil. It also requires all companies with a presence in Brazil and handle crypto to provide periodic reports on their activities and customers to the Federal Revenue Service and the Financial Activities Control Council.
No Provisions for Loss Write-Offs
Ismael Decol, the legal head of Declare Cripto, noted that the law does not include provisions for traders who want to write off their losses. He emphasized that further clarification from regulatory bodies is needed to make the legislation clearer to users and investors.
The bill will now be passed to the President’s office for approval or veto within 15 working days.
Hot Take: Brazilian Senate Approves Crypto Tax Rate
The Brazilian Senate has approved a bill that imposes a fixed 15% tax rate on crypto profits earned on overseas platforms. If enacted, this law will require Brazilian crypto investors to declare their earnings separately from other income and capital gains. The amended bill replaces the initial proposal for a sliding scale-type structure, providing relief for some active traders. However, the law does not include provisions for traders to write off their losses. Further clarification is needed from regulatory bodies to ensure clarity for users and investors. The bill now awaits the President’s decision.
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