Brazilians may soon need to raise taxes on crypto held abroad.
Brazilians may soon be required to pay a tax of up to 15% on income earned on money transfers outside the country after new income tax laws were approved by the Brazilian Senate on November 29.
The bill has already passed the House of Representatives and is expected to be approved by President Luiz Inacio Lula da Silva, as his administration has changed the income tax rules, Cointelegraph Brazil reports.
According to the bill, a Brazilian who earns more than $1,200 (6,000 Brazilian reals) in transactions outside Brazil will be taxed starting January 1, 2024. The change would make those funds taxed at the same rate as funds held domestically. Funds earned prior to that date will be taxed when received by the owner, meanwhile, earnings on funds earned prior to December 31 will be taxed at 8%.
Unfortunately, you are getting this wrong
Brazil does not tax people regardless of residency status.
What will change with PL 4173/23:
Currently: Tax deferral
If you own an offshore company or believe you are a Brazilian tax resident, you only pay tax when you distribute profits to… https://t.co/iiG1YyVUr9
– BowTiedGlobe | Your Freedom Dealer (@BowTiedGlobe) November 29, 2023
The bill also applies to “special funds” – investment funds with a single shareholder – and foreign companies active in Brazil's financial market. By 2024, the government hopes to collect $4 billion (20.3 billion Brazilian reals). Senator Rogerio Marinho expressed his opposition to the bill. he said:
“The government is creating taxes because it is a poor manager.”
Related: OKX launches crypto exchange, wallet services in Brazil
In September, the governor of Banco Central do Brasil, Roberto Campos Neto, announced plans to tighten regulations on cryptocurrency in connection with the sharp rise in popularity in the country. At the time, he said he suspected crypto was being used for tax evasion.
Brazil's central bank was given jurisdiction over virtual asset service providers in June.
Crypto-based securities are regulated by the Comissão de Valores Mobiliários – Brazil's equivalent of the United States' Securities and Exchange Commission.
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