Brazil's President Signs Law Imposing Taxes on Crypto Assets Held Abroad

Brazilian President Luis Inácio Lula da Silva has enacted a law that imposes taxes on cryptocurrencies held abroad by Brazilian citizens. The law was signed on December 12 and published in the Official Diary of the Union on the following day. It will become effective from January 1, 2024. The tax will not only apply to cryptocurrencies but also to profits, dividends, and investments made by Brazilian taxpayers in various foreign assets. The Brazilian government aims to collect about $4 billion in new taxes in 2024. Those who start paying the taxes in 2023 will receive a benefit and pay an 8% levy on all income earned before 2023 in installments, with the first installment due in December. Starting in 2024, the tax rate will be set at 15%. Earnings of up to $1,200 will be exempt from taxation. Brazilian stablecoin issuer Transfero's controller, João Carlos Almada, points out that while taxing digital asset income is not new in Brazil, certain aspects of the law still require clarification.

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