The Brazilian Congress Moves to Tax Crypto Assets Held Abroad
The Brazilian Congress has approved amendments to a bill that would allow for the taxation of crypto assets held abroad by citizens of Brazil. The legislation defines cryptocurrencies as financial assets for the purpose of taxing foreign investments. If approved, this would subject crypto assets held overseas to the same tax rules as traditional assets. The amendment, sponsored by Congressman Merlong Solano, aims to promote equal taxation of crypto assets held both in Brazil and abroad. Previously, cryptocurrencies held overseas were taxed less than those held in Brazilian exchanges. The new law would also bring crypto assets under the same tax rules as traditional investments.
Key points:
– The legislation would tax gains made from fluctuating crypto prices against the Brazilian real.
– Earnings up to 6,000 reais will be exempt from taxation.
– Earnings between 6,000 and 50,000 reais will be subject to a 15% tax rate.
– Earnings above 50,000 reais will attract taxes set at 22.5%.
– The new taxes would only apply to assets held in crypto exchanges that do not operate in Brazil.
The new tax regime could potentially make trading cryptocurrencies on local exchanges less expensive, particularly for investors earning more than $10,000 on their assets. It is speculated that the law may also encourage investors to repatriate their funds back into Brazil to avoid high tax charges. The bill will be voted on August 28, and if passed, the new tax regime will come into effect in early 2024.
Hot Take
The Brazilian Congress’s move to tax crypto assets held abroad is aimed at promoting equal taxation and bringing crypto assets under the same tax rules as traditional investments. This could potentially benefit local investors and boost crypto-related activity in Brazil. However, it remains to be seen how this move will impact the overall cryptocurrency market in the country.
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