The Brazilian Senate approved a new tax policy, effective January 1, that imposes a tax of up to 15% on profits from cryptocurrencies held in foreign currency.
The recent approval by the Brazilian Senate of new income tax regulations on crypto profits marks a change in the country’s financial landscape.
This new legislation, initiated by the administration of President Luiz Inácio Lula da Silva, has already been approved by the Chamber of Deputies and requires a maximum tax of 15% on cryptocurrency earnings obtained in foreign currency. This rule, which will come into effect once 2024 begins, is aimed at people who earn more than $1,200, or 6,000 Brazilian reals, on these platforms.
An important aspect of this regulation is its uniformity; The tax rate for funds held abroad is aligned with that of domestic funds. In particular, profits withdrawn before the end of 2023 will be taxed at a reduced rate of 8%, rising to 15% thereafter. The legislation also covers “exclusive funds” and foreign companies in Brazil’s financial sector, with the goal of generating around $4 billion (20.3 billion Brazilian reais) in revenue in 2024.
Senator Rogério Marinho criticized the bill, attributing it to government mismanagement rather than a structured financial strategy.
At the same time, Brazil is seeing an increase in the use of cryptocurrencies, which has led to regulatory tightening. In September, the governor of Brazil’s Central Bank announced plans to improve cryptocurrency regulations to prevent tax evasion. Previously, the central bank gained authority over virtual asset service providers, in parallel to the supervision of cryptocurrency-based securities by the Comissão de Valores Mobiliários.
