Disclaimer: Information found on CryptoreNews is those of writers quoted. It does not represent the opinions of CryptoreNews on whether to sell, buy or hold any investments. You are advised to conduct your own research before making any investment decisions. Use provided information at your own risk.
CryptoreNews covers fintech, blockchain and Bitcoin bringing you the latest crypto news and analyses on the future of money.
The President of Brazil, Luis Inácio Lula da Silva, has enacted a law that imposes taxes on cryptocurrency assets owned abroad by Brazilian nationals.
Lula approved the legislation on Dec. 12, which was subsequently published the next day in the Diário Oficial da União, or the Official Diary of the Union. This law is set to take effect on Jan. 1, 2024.
The new tax regulations will not be limited to cryptocurrencies but will also encompass profits and dividends earned by Brazilian taxpayers from foreign investment funds, platforms, real estate, or trusts. The Brazilian government aims to generate approximately 20 billion reals ($4 billion) in new tax revenue in 2024.
Related: IRS identifies 4 crypto crimes among its leading cases in 2023
Individuals who start paying these taxes in 2023 will benefit from an early-bird incentive: they will incur a tax rate of 8% on all income earned up to 2023 in installments, with the first payment commencing in December. From 2024 onward, the tax rate will increase to 15%. Earnings from abroad up to 6,000 Brazilian reais ($1,200) will be exempt from taxation.
Related Posts
In an interview with Cointelegraph, João Carlos Almada, controller at the Brazilian stablecoin issuer Transfero, noted that the taxation of digital asset income is not a novel concept in the country. However, he mentioned that certain elements of the law could benefit from further clarification:
“Some points in the text need improvement, for example, compensation for losses in the period, something similar to the tax rules for stock assets. I believe that with regulation evolving in the country, we will go through new discussions on this topic, aiming to provide even greater transparency to the market, thus generating more credibility.”
Brazil is not the only nation scrutinizing the overseas cryptocurrency holdings of its citizens. In November, the Spanish Tax Administration Agency also reminded its citizens of their responsibilities to declare cryptocurrencies held abroad. However, this requirement applies only to individuals with digital asset balances exceeding the equivalent of 50,000 euros (around $55,000).
Additional reporting by Cassio Gusson
Magazine: Lawmakers’ fear and doubt drives proposed crypto regulations in US
