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Brazil’s president, Luis Inácio Lula da Silva, has assented the country’s crypto tax bill into law. Under the new law, Brazilians will be taxed 15% on all of their foreign digital asset incomes. Profits and dividends earned by Brazilian citizens from real estate, investment funds, and platforms will also be subjected to the new taxes.
Brazil anticipates up to 20 billion real ($4 billion) collections from the new law in 2024, which comes into force on January 1. The law was signed on December 12 and published in the Diário Oficial da União (Official Diary of the Union) the following day.
To encourage compliance, Brazilians who pay the new taxes in 2023 will enjoy a reduced 8% tax rate on incomes earned up to 2023. The early birds will pay the levy in instalments beginning in December.
Law aligns with global trends and Brazil’s crypto momentum
Brazil’s move occurs within the broader global trend, with numerous countries seeking to bring digital assets into the legislative net. In November, Spain informed its citizens holding over 50,000 euros ($55,000) in crypto overseas to declare before the end of March 2024.
The regulations come when the industry yearns for certainty, with digital assets operating outside the existing laws for most jurisdictions. The emergence of crypto laws such as Brazil’s has been seen as an endorsement of the digital assets class, paving the way for greater adoption.
The controller of Brazilian stablecoin issuer Tansfero, João Carlos Almada, says this is not the first time Brazil is taxing digital asset income. However, he notes that the new law needs some improvements, including how taxpayers are compensated for losses similar to the taxation on stock assets. Almada has called for further discussions aiming to streamline the sector for improved credibility and transparency.
The post Brazilians to pay 15% tax on overseas crypto profits in new law appeared first on Invezz
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