Brazil to Tax Crypto Assets Held Abroad Starting 2024; Aims to Generate $4B in Revenue
Summary:
Brazil's President, Luis Inácio Lula da Silva, has approved a law taxing citizens' overseas-held crypto assets. The law, effective from 2024, applies to income and dividends earned from foreign investments, aiming to generate about 20 billion reals ($4 billion) next year. An early payment incentive offers an 8% tax on income made until 2023, rising to 15% next year. Foreign earnings below 6,000 Brazilian reais (~$1,200) are tax-free. Brazil joins other countries like Spain in monitoring citizens' foreign crypto assets.
Brazil's President, Luis Inácio Lula da Silva, has ratified a law that imposes a tax on crypto assets owned by its nationals in foreign countries. This law was endorsed by Lula on Dec. 12 and printed in the Union's official Gazette the next day. Despite some objections, the law will be active from the beginning of 2024. The fresh tax rule is applicable not just to cryptocurrency, but also to income and dividends that Brazilians earn from foreign investments, platforms, real estate or trusts. The objective of the Brazilian administration is to generate about 20 billion reals ($4 billion) in new tax revenue in the upcoming year. Those who commence their tax payments this year are provided with a prompt payment benefit: an 8% tax on all income earned until 2023, payable in increments, with the initial payment starting in December. From next year onwards, the tax rate will increase to 15%. International earnings amounting to 6,000 Brazilian reais (~$1,200) or less will be tax-free. João Carlos Almada, Controller at Transfero, a Brazilian stablecoin provider, stated to Cointelegraph that the levying of taxes on digital asset income isn't exactly a novel concept in the country. Though, he admitted that certain sections of the law could benefit from more clearness: “The text could be enhanced in some areas, like compensation for losses incurred during a specific period, which is akin to the tax rules for stock assets. As regulations evolve in the country, I suspect we will engage in more discussions concerning this matter, with the goal of providing complete transparency to the market, thereby promoting additional credibility.” Brazil isn't the sole country scrutinizing the foreign crypto assets of its citizens. In November, citizens of Spain were reminded by their Tax Administration Agency about their duty to declare any crypto assets held abroad. However, this is only applicable to those who have digital assets worth more than 50,000 euros (approximately $55,000).
Published At
12/15/2023 11:00:06 AM
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