According to a report by CoinTelegraph, Brazil's Congress is mulling legislation that would impose higher taxes on cryptocurrencies held by Brazilians overseas. The congressional committee has approved amendments to a draft bill recognizing cryptocurrencies as financial assets for tax purposes in foreign investments. The bill proposes taxing gains from crypto asset price fluctuations and foreign exchange rate fluctuations to promote equal tax treatment, as overseas crypto investments currently receive lower tax breaks.
Under the new rules, overseas earnings up to 6,000 BRL ($1,200) will be exempt from taxation, and earnings between 6,000 and 50,000 (~$10,000) will be taxed at 15%. Any earnings above that will be taxed at 22.5%. The legislation will apply only to crypto exchanges without offices in Brazil, potentially making local exchanges a more economical option for some investors. The new law could also encourage foreign exchange platforms to establish offices in Brazil. The bill is set to be voted on Aug. 28, with the new taxation rules taking effect in January 2024 if approved.