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Brazilians may soon be required to pay up to 15% tax on income derived from cryptocurrencies held on exchanges outside the country, after new income tax rules were approved by the Brazil Senate on Nov. 29.

The bill has already passed in the Chamber of Deputies and is expected to be approved by President Luiz Inácio Lula da Silva, as his administration initiated the income tax rule changes, Cointelegraph Brazil reports.

Under the bill, any Brazilian who earns more than $1,200 (6,000 Brazilian reals) on exchanges based outside Brazil would be subject to the tax, effective Jan. 1, 2024. The change makes those funds taxable at the same rate as funds held domestically. Funds earned before that date would be taxed when accessed by the owner, meanwhile, earnings on funds accessed before Dec. 31 will be taxed at 8%.

The bill also affects “exclusive funds” — investment funds with a single shareholder — and foreign companies active on the Brazilian financial market. The government hopes to raise $4 billion (20.3 billion Brazilian reals) in 2024. Senator Rogério Marinho voiced his opposition to the bill. He said:

“The government is creating a tax because it is a poor manager.” 

Related: OKX launches crypto exchange, wallet services in Brazil

In September, the governor of the Banco Central do Brazil Roberto Campos Neto, announced plans to tighten regulations on cryptocurrency in connection with a sharp rise in its popularity in the country. At the time, he said he suspected crypto was being used for tax evasion. 

The Brazilian central bank was given jurisdiction over virtual asset service providers in June.

Crypto-based securities are regulated by the Comissão de Valores Mobiliários — Brazil’s equivalent of the United States Securities and Exchange Commission.

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