(MENAFN- CoinXposure)
Legislators in Brazil are moving forward with a bill that would increase taxes on cryptocurrencies held abroad. A congressional committee has approved amendments to a bill that recognizes cryptocurrencies as“financial assets” for tax purposes in foreign investments, according to local reports.
In addition, the proposed legislation taxes gains from fluctuations in the prices of crypto assets relative to Brazil's fiat currency as well as fluctuations in foreign exchange rates.
The legislation places crypto assets held by Brazilians overseas under the same tax rules as traditional assets
According to Congressman Merlong Solano, the revision aims to promote tax parity, as crypto investments made abroad presently receive more favorable tax breaks.
Under the new regulations, foreign revenues up to 6,000 Brazilian reais ($1,200) will be exempt from taxation. Between $6,000 and $50,000 ($10,000) in earnings are subject to a 15% tax rate.
Above this threshold, the tax rate will be 22.5%. According to the law, only cryptocurrency exchanges without facilities in Brazil will be affected by the modifications.
According to legal experts, the new rules could make local exchanges a less expensive option for some investors, particularly those with gains exceeding the highest tax bracket.
Additionally, the law could increase crypto exchange activity on a national scale and entice international actors to establish offices in the country.
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Several global crypto exchanges, including Binance, Coinbase, Bitso, and Crypto.com, as well as local exchanges such as Mercado Bitcoin and Foxbit, operate in the country.
On August 28, the Brazilian Congress will deliberate on the bill. If approved, the new tax will be implemented in January 2024.
Brazil has witnessed a rapid expansion of crypto-related activities in recent months. The nation's central bank recently announced that its central bank digital currency (cbdc) will now be known as Drex.
As part of the introduction of Drex, the central bank intends to implement a tokenization system designed to expand access to capital for businesses.