Brazil’s congressional committee approved changes to a bill classifying foreign cryptocurrency exchanges as “financial assets” for taxation. The legislation seeks to raise taxes on overseas-held cryptocurrencies. The National Congress will vote on August 28. If passed, the law will subject Brazilians’ foreign-held crypto to the same tax rules as traditional assets from January 2024.
The proposed law also taxes gains from crypto price changes relative to Brazilian reais and forex rates. Deputy Merlong Solana highlights its aim for fair taxation, countering the advantage of lower taxes on overseas crypto investments. Under the new rules, foreign earnings face different tax rates, with up to 6,000 Brazilian reais (about $1,200) being tax-free. Earnings from 6,000 to 50,000 reais (around $10,000) incur a 15% tax, while above that, it’s 22.5%.
This move intends to attract foreign investment to Brazil’s crypto market. The amendments target non-physically present exchanges. Leading global exchanges like Binance, Coinbase, Bitso, and Crypto.com operate in Brazil, alongside local players like Mercado Bitcoin and Foxbit.
Experts predict these changes might make local exchanges more appealing for some investors, particularly those with significant profits. The law could boost domestic crypto exchange operations and encourage foreign companies to establish local offices. Users would prefer Brazilian exchanges to evade high foreign income taxes on crypto gains.
By FCCT Editorial Team
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