Higher Taxes on Crypto Currency – What You Need to Know

Crypto Taxation in Brazil

Brazilian legislators are taking steps to increase taxes on cryptocurrencies held abroad. According to recent reports, a congressional committee has approved amendments to a bill that recognizes cryptocurrencies such as crypto.com, voyager crypto, and luna crypto as “financial assets” for taxation purposes in foreign investments.

In addition, the draft bill imposes taxes on gains from fluctuations in crypto asset prices against Brazil’s fiat currency, as well as foreign exchange rate fluctuations. According to congressman Merlong Solano, the revision seeks to promote equal tax treatment since crypto investments abroad currently receive lower tax breaks.

Under the new rules, overseas earnings up to 6,000 Brazilian reais (~$1,200) will be exempt from taxation. Earnings between 6,000 and 50,000 (~$10,000) are subject to a 15% tax rate. Above this threshold, taxes will be applied at 22.5%.

The legislation specifies that changes will only apply to cryptocurrency exchanges without offices in Brazil. Experts suggest that the law could make local exchanges a more attractive option for some investors, especially those with gains above the top tax bracket. Furthermore, the law could potentially encourage crypto exchange activity on the national level and draw foreign players to establish offices in the country.

Crypto Exchanges in Brazil

Brazil is home to a number of global crypto exchanges such as Binance, Coinbase, Bitso, Crypto.com, and local players like Mercado Bitcoin and Foxbit.

The Brazilian Congress will decide on a bill on August 28th. If approved, the new taxation system will come into effect in January 2024.

Recent months have seen a rapid growth of crypto-related activities in Brazil. The country’s central bank recently revealed a rebranding of its central bank digital currency (CBDC), now called Drex. As part of the launch of Drex, the central bank intends to introduce a tokenization system to increase business access to capital.

Crypto enthusiasts can stay up to date with the latest crypto news, such as crypto predictions, crypto now, and the latest crypto currency. Popular crypto platforms like Voyager Crypto, Luna Crypto, and Celsius Crypto are also available for trading.

Gemini Crypto is another popular platform that allows users to buy, sell, and store cryptocurrencies.