The Brazilian government is considering legislation that would increase taxes on cryptocurrencies held overseas. The proposed bill recognizes cryptocurrencies as “financial assets” for tax purposes in foreign investments. It aims to promote equal tax treatment, as crypto investments abroad currently receive lower tax breaks. The legislation would subject crypto assets held by Brazilians overseas to the same tax rules as traditional assets. Under the new rules, overseas earnings up to 6,000 Brazilian reais (~$1,200) would be exempt from taxation, while earnings between 6,000 and 50,000 (~$10,000) would be subject to a 15% tax rate. Taxes above this threshold would be applied at 22.5%. The changes would only apply to cryptocurrency exchanges without offices in Brazil. The bill is set to be voted on by Brazil’s Congress on August 28, and if approved, the new taxation will take effect in January 2024. The legislation could make local exchanges a more cost-effective option for investors with gains above the top tax bracket and potentially attract foreign players to establish offices in Brazil.
