Brazilian President Luis Inácio Lula da Silva has enacted a new law concerning the taxation of crypto held overseas by citizens of Brazil, signing the bill into law on December 12th, 2023. According to this law, citizens will pay a maximum tax of 15% on profits from crypto, However, those who begin their payments this year will receive an advantage and pay only 8% up to the end of 2023, the first installment payable in December and assuming a 15% rate from this point onwards.
Those earning up to US$1,200 derivable from overseas cryptocurrencies are exempt from taxation, but activities including real estate, investment funds, trusts and platforms “will nonetheless incur taxes at varying levels. It is estimated that the Brazilian government stands to yield an estimated $4 billion in taxes for 2024. And the encouraging environment needs for expanding regulatory oversight, for example, Roberto Campos Neto, the Brazilian central bank governor, outlined plans to enhance crypto regulations as early as last September.
So, have any predictions on how the impending overseas tax bill might affect crypto companies? Investment funds featuring a single shareholder and foreign companies active within Brazil’s financial landscape will of course need to brace themselves, and Transfero, a Brazilian issuer of stablecoins, has described the implications of the new legislation on exclusive funds as ultimately “extensive” . It appears as multifaceted supervision is on the horizons for entities trading not only in crypto, but in more traditional money sectors as well.
