- Brazil approves 15% tax as Senate endorses tax on foreign-held crypto, effective 2024.
- Earnings over $1,200 taxed at 15%, prior funds at 8%.
- Brazil tightens crypto regulations amid surging digital asset popularity.
Brazil’s Senate greenlights new income tax rules, enforcing a 15% tax on crypto earnings from foreign exchanges. The legislation, already approved by the Chamber of Deputies, awaits President Luiz InĂĄcio Lula da Silva’s sanction.
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Set to be effective from January 1, 2024, the tax applies to earnings exceeding $1,200 from international exchanges, mirroring the domestic tax rate. Funds accessed before December 31, 2023, face an 8% tax, while post that date incurs the full 15%.
The legislation also impacts “exclusive funds” and foreign firms in Brazil’s financial market. The government aims for $4 billion in revenue from these taxes in 2024. Senator RogĂ©rio Marinho criticizes the bill, attributing it to poor government management.
This regulatory move aligns with the surging popularity of cryptos in Brazil. In September, the governor of Banco Central do Brazil proposed tighter crypto regulations, expressing concerns about potential tax evasion.
The central bank gained authority over virtual asset service providers this year, while crypto-based securities fall under ComissĂŁo de Valores MobiliĂĄrios (CVM), Brazil’s equivalent of the SEC.
As Brazil seeks to bring cryptos under its fiscal purview, this tax on foreign-held crypto marks a significant step in regulating the burgeoning digital asset landscape in the country.
Brazil has come a long way with its crypto and blockchain ventures. Earlier this year the nationâs crypto giant Mercado got the green light from Brazilâs Central Bank to launch a digital bank. This move helped bridge crypto and traditional finance in the country.
Similarly, other crypto-forward moves within the borders of Brazil include Revolut rolling out its crypto and forex services. In addition, Brazil is still working on launching its own US dollar stablecoin via Brazil financial giant, BTG Pactual.
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