The Brazilian Senate reportedly approved new crypto tax income regulations to see citizens pay up to 15% tax on earnings derived from offshore cryptocurrencies.
According to reports by Yahoo Finance, the Brazilian Senate gave the green light to new income tax regulations, which could see Brazilians pay up to 15% tax on earnings derived from crypto held on international exchanges.
Brazilians Could Pay Up to 15% Tax on Offshore Earnings
Brazil’s new tax regime was announced in May and aims to increase government revenue by taxing capital from offshore financial investments made by Brazilians residing there. According to the new rule, income earned from January 1, 2024, will be subject to the new policies.
Fortunately, you are misunderstanding thisBrazil ?? is not taxing people regardless of residencyWhat changes with PL 4173/23:CURRENTLY: Tax-deferralIf you own an offshore company or trust while being a Brazil tax resident, you only pay tax when it distributes profits to… https://t.co/iiG1YyVUr9
— BowTiedGlobe | Your Freedom Dealer (@BowTiedGlobe) November 29, 2023
The bill has received approval from the Chamber of Deputies and, if sanctioned by President Luiz Inacio Lula da Silva, will take effect on January 1, 2024.
The bill will apply to any Brazilian citizen earning over 6,000 Brazilian reals ($1,200) on offshore exchanges. The tax amendments tax these funds at the same rate as domestic funds. According to the bill, funds earned before January 1 would be taxed when accessed by its owners, and funds made before December 31, 2023, would be taxed at a rate of 8%.
Government Aims to Raise $4 Billion from the Tax in 2024
The Brazilian government has set a revenue target of $4 billion from these taxes in 2024. In its greater tax framework, the legislation also affects “exclusive funds” – investment funds with a single shareholder and foreign companies operating within the Brazilian financial market.
The law received criticism from Brazilian Senator Rogerio Mariho, who said the government is introducing this tax due to poor management.
Brazil has become bullish on crypto, with Brazil’s oldest bank, Banco do Brazil, now allowing citizens to pay their tax bills using crypto.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
