Brazil Passes Law to Tax Overseas Crypto Holdings in 2024

In a significant move, Brazil’s President Luis Inácio Lula da Silva has sanctioned a pioneering law that imposes taxes on cryptocurrency and other investments held overseas by Brazilian nationals. This legislation, effective on January 1, 2024, marks a substantial shift in the country’s approach to the burgeoning digital currency market.

Brazil Sets 15% Tax on Overseas Crypto

The law stipulates that profits from cryptocurrencies held overseas will be subject to a tax of up to 15%. However, an incentive is offered to taxpayers who start paying taxes this year. These individuals will be eligible for a reduced tax rate of 8% on all income accrued up to 2023, payable in installments starting in December 2023. From 2024 onwards, the tax rate increases to 15%. Additionally, the law provides a threshold, exempting overseas earnings below $1,200 from this taxation.

The scope of the law extends beyond cryptocurrencies. It also encompasses profits and dividends from investment funds, platforms, real estate, or trusts. This broad coverage signifies the Brazilian government’s intent to cast a wider net in its taxation policies.

New Crypto Regulations Reflect Global Policy Shift

The law’s implications are far-reaching, affecting not just individual cryptocurrency holders but also investment funds with a single shareholder and foreign companies active in the Brazilian financial market. João Carlos Almada, Controller at Transfero, a Brazilian stablecoins issuer, commented on the new law. Almada highlighted the need for improvements, particularly in compensating for losses, similar to tax rules applicable to stock assets. He expressed optimism for future discussions aimed at enhancing market transparency and credibility.

This development is part of a larger trend of increasing regulatory oversight of cryptocurrencies. In September, Brazilian central bank governor, Roberto Campos Neto, announced intentions to tighten cryptocurrency regulations, echoing a global movement towards more regulated digital asset markets.

Brazil’s move to tax overseas crypto assets aligns with a growing global trend. For instance, Spain’s Tax Administration Agency recently reminded its citizens to declare crypto stored overseas, targeting individuals with digital assets exceeding 50,000 euros.

The Brazilian government expects to collect up to $4 billion in new taxes 2024 through this legislation. This projection underscores the law’s potential fiscal impact and the government’s commitment to harnessing the economic opportunities presented by digital assets.

Read Also: OpenAI CEO Sam Altman Denies Imminent Launch Of ChatGPT 4.5

The post Brazil Passes Law to Tax Overseas Crypto Holdings in 2024 appeared first on CoinGape.

Crypto Feed:
https://ift.tt/n5yukA0
Maxwell Mutuma
CoinGape