The Brazilian government is stepping up its efforts to regulate crypto-currencies held abroad by its citizens. A new tax law, recently signed by President Luiz Inácio Lula da Silva, introduces significant taxes on gains from crypto-currencies on foreign platforms. This measure is designed to boost tax transparency and increase state revenues.
The new tax rules
Taxation of foreign crypto gains
From January 1, 2024, Brazilian citizens will have to pay up to 15% tax on income generated by crypto-currencies held on foreign platforms. The legislation, approved by the Federal Senate and the Chamber of Deputies, affects anyone whose annual earnings exceed 6,000 Brazilian reals (around 1,200 USD). Gains made before this date will be taxed at 8%.
Mandatory transaction reporting
In addition to taxation, Brazil’s Federal Revenue Department (RFB) requires individuals and legal entities to report monthly all crypto-currency transactions exceeding 10,000 Brazilian reals. This measure is accompanied by severe penalties for missing or incorrect reporting, with fines of up to 3% of the value of unreported transactions.
Impact et perspectives
The Brazilian government expects to collect around 20.3 billion reals (4 billion USD) in 2024 thanks to this new law. The move comes amid the growing popularity of crypto-currencies in Brazil, with trading volumes surpassing those of the São Paulo Stock Exchange (B3).
Reactions and criticism
Dissenting opinions
The new legislation has prompted mixed reactions. Some crypto-currency experts believe the law brings much-needed regulation and transparency, while others criticize the government for its economic management, seeing the tax as a desperate measure to boost tax revenues.
Consequences for investors
For Brazilian investors, this law represents an additional challenge. Foreign exchange platforms will have to comply with the new reporting requirements, which could complicate cross-border transactions and increase compliance costs.
Conclusion
The introduction of this new tax legislation marks a significant turning point in the regulation of crypto-currencies in Brazil. By seeking to tax gains from foreign platforms, the government aims to increase transparency and tax revenues, but also raises challenges for investors and exchange platforms. It will be crucial to monitor the evolution of this legislation and its impact on the crypto-currency market in Brazil.
