[Brazilian President approves 15% tax on overseas cryptocurrency holdings]
Starting January 1, 2024, Brazil will impose a flat tax rate of 15% on cryptocurrency profits, with annual income up to BRL 6,000 (approximately $1,200) exempt from tax.
Brazilian President Luis Inácio Lula da Silva signed a bill to tax overseas crypto assets starting in 2024. The bill not only targets cryptocurrencies, but also covers profits and dividends from overseas assets. The Brazilian government aims to raise approximately 20 billion rials (approximately $4 billion) in 2024 through this tax.
To encourage early compliance, taxpayers starting in 2023 will enjoy a reduced tax rate of 8%, payable in instalments. João Carlos Almada, the controller of Brazilian stablecoin issuer Transfero, believes that some parts of the bill need further clarity.
Crypto taxation is on the rise globally, with Brazil joining the ranks of other countries scrutinizing citizens’ offshore crypto assets. Spain reminds citizens to declare overseas crypto assets, and the United States sets clear crypto tax rules. U.S. crypto investors adopt tax-loss harvesting strategies to reduce their tax burden.