Brazil is overhauling how it taxes cryptocurrencies, with changes to be proposed in the National Congress.
This new plan will treat digital currencies similarly to stocks and securities, marking a shift from viewing them as commodities.
A 15% profit tax on cryptocurrency earnings is proposed, moving away from taxing based on the volume of trade.
Currently, Brazil taxes digital asset transactions under 5 million reais (around $990,000) at 15%, with the rate increasing to 22.5% for transactions over 30 million reais ($6 million).
Investors trading more than 35,000 reais ($7,000) fall under these rules, a threshold significantly higher than the 20,000 reais ($4,000) set for stock trades.
It’s yet to be seen if the new rules will adjust these limits, possibly easing the burden on smaller-scale traders.
The 2025 target for enacting these tax laws shows Brazil’s commitment to better monitor crypto transactions, aiming to reduce tax evasion and illegal dealings.
This follows the identification of 25,000 unusual crypto tax reports, uncovered through detailed analyses.
On the global stage, Brazil stands out for its crypto engagement, ranking ninth among 146 countries in 2023, according to Statista.
It’s particularly active in peer-to-peer exchanges. Last year, 3.2 million Brazilians and over 89,000 businesses were involved with cryptocurrencies, highlighting its widespread adoption.
Brazil is also home to three Bitcoin-friendly tourist spots: São Thomé das Letras, Jericoacoara, and Rolante, each bustling with merchants accepting Bitcoin.
This acceptance indicates a growing trend towards integrating cryptocurrencies into everyday transactions, illustrating Brazil’s progressive stance on digital currencies.