January 20, 2022 - Douglas Myser

Taxation of crypto by country. The Brazillian Federal Reserve Service has issued guidelines for investing in cryptocurrencies. According to the guidance, cryptocurrencies are not designed as legal tendar, but rather as a financial asset. According to the rules for fianancial assets, the purchase and ownership of cryptocurrency must be reported to Brazillian tax authorities on an individual's annual tax return. Each type of cryptocurrency must be reported separately at cost basis. Generally, the cost basis is the purchase price of the asset, so the taxpayer needs to provide information on that price. Appreciation needs to be reported only when realized, and capital gains realized from the sale of it will be subject to a tax rate of 15 to 22.5 percent, depending on the amount of income. Capital losses resulting from the sale of cryptocurrency cannot be offset. Maybe those with losses should consider Tax Resolution. Services. Taxation of crypto by country.

Offshore investments that exceed the value of $100,000 held by Brazillian residents must be reported and disclosed to the Brazillian Central Bank. It is unclear whether cryptocurrencies can be regarded as offshore investments and if so, under what circumstances. Japan has passed the Virtual Currency Act in early 2017, becoming the first country to recognize cryptocurrency as a legal method of payment. Its tax agency has reportedly created a database on cryptocurrency investors, and teams in Tokyo and Osaka are closely watching electronic trading.

The EU's Electronic Money Directive defines the Term: "Electronic Money" means electronically, including magnetically stored monetary value as represented by a claim on the issuer which is receipt of funds for the purpose of making payment transcations and which is accepted by a natural or legal person other than the electronic money issuer. By referring to the function of money, which is to facilitate trade in the economy, the Court of Justice of the European Union has said the key characteristics of money is to use it as a menas of payment in the real economy.