Is Crypto Tax Coming to Brazil’s Richest State?

The state parliament of São Paulo, in Brazil, is set to vote on the introduction of a tax on cryptocurrencies, with a private member’s bill making rapid progress through the legislature.

The state’s parliamentary gazette reports that the bill is now at its final committee stage.

The bill was put forward by Legislative Assembly deputy Thiago Auricchio, of the Liberal Party. Auricchio’s bill proposes that cryptocurrency transactions in the state be taxed, and also seeks to impose an inheritance tax on Bitcoin and altcoins. People wishing to give gifts in cryptocurrency could also be subject to taxation under the bill.

Auricchio also proposes imposing a 10% surcharge on late crypto tax payment, rising to 20% after six months.

The gazette quotes Auricchio as stating,

“[Cryptocurrencies] are financial assets with market value. They are gaining popularity by the day. It makes no sense not to be taxing [crypto earnings].”

The bill has made rapid progress since Auricchio first put it forward at the beginning of this month. It has been tabled for forthcoming sessions in the assembly, and will first pass before the assembly’s justice and constitutional affairs committee before deputies determine its fate.

São Paulo is the richest and most populated state in the country. It is home to the biggest city in the country, has over 45 million residents and is responsible for 33.9% of Brazil’s GDP.

As reported, Brazil’s National Treasury ruled earlier this year that the country’s citizens must declare all domestic cryptocurrency transactions as of August 1 this year. The new ruling means that all Brazilian companies dealing with domestic transactions – no matter how small – must make full disclosures to the authorities. In the case of international crypto dealings, Brazilian citizens themselves have to make declarations on transactions worth USD 7,600 or more.

Meanwhile, as reported yesterday, Bitcoin is getting more attention in South America as national fiats flounder – with Argentinians paying a premium for cryptocurrencies and the Venezuelan national lottery handing out cryptocurrency prizes.