Big news from Brazil! The Senate just gave the thumbs-up to new income tax rules that might have Brazilians shelling out a max of 15% on the profits they make from cryptocurrencies stored on foreign exchanges. This bill, which got the green light from the Chamber of Deputies, is now waiting for President Luiz Inácio Lula da Silva’s stamp of approval, considering it was his administration that kicked off these income tax changes.
Starting January 1, 2024, folks in Brazil raking in more than $1,200 (6,000 Brazilian reals) from exchanges outside the country will face this tax. The tax rate for money parked in international exchanges will match what’s applied to funds kept within Brazil. But here’s the twist: profits made from funds accessed before December 31, 2023, get an 8% tax, while anything after that date gets hit with the full 15% rate.
Now, here’s where it gets even more interesting: the law also impacts ‘exclusive funds,’ those investment funds owned by a single shareholder, and foreign companies doing business in Brazil’s financial market. The government’s aiming to rake in about $4 billion (20.3 billion Brazilian reals) from these taxes in 2024.
But not everyone’s on board with this. Senator Rogério Marinho isn’t too thrilled about the bill, pointing fingers at the government for bringing in a tax because of, well, not-so-great management.
This whole deal to regulate and tax cryptocurrencies is happening at a time when they’re getting super popular in Brazil. Just in September, the head honcho at Banco Central do Brazil laid out plans to toughen up the rules around cryptocurrencies, worried about potential tax dodging.
And hey, Brazil’s central bank now has the power over companies offering virtual asset services, while the Brazil version of the SEC, the Comissão de Valores Mobiliários, is keeping an eye on crypto-based securities.
