Brazil Slaps 15% Tax on Offshore Crypto Earnings: A Deep Dive

• New Income-Tax Regulations for Brazilian Crypto Users
• When Will the Regulation Take Effect?
• Opposition to the New Law
• Popularity of Cryptocurrencies in Brazil

New Income-Tax Regulations for Brazilian Crypto Users

The Brazilian Senate has given approval for the introduction of new income-tax schemes that may result in citizens having to pay a 15% tax on income generated from cryptocurrencies held in foreign exchanges, as informed by Yahoo Finance on Thursday.

When Will the Regulation Take Effect?

Subject to the sanction of President Luiz Inacio Lula da Silva, the new regulation could be operational from January 1. Previously, the bill received approval from the Chamber of Deputies. Brazilians earning over $1,200 from foreign exchanges, and investment funds managed by a single shareholder will be most impacted. The Brazilian government reportedly intends to raise $4 billion in revenue from these taxes in the upcoming year, according to Yahoo Finance.

Opposition to the New Law

Brazilian Senator Rogerio Marinho has voiced criticism against the new law, arguing that the introduction of the tax is a result of ineffective governmental management.

Popularity of Cryptocurrencies in Brazil

Cryptocurrencies are rapidly gaining popularity in Brazil, with the country currently ranking ninth worldwide in terms of crypto adoption, based on the findings of a report by Chainalysis. Furthermore, the report indicated that Brazil manages approximately $100 million in assets for spot bitcoin exchange-traded funds (ETFs).

Edited by Jonathan Stoker