Opinion by: Robin Singh, Koinly CEO
Crypto may be the first tax lever governments to pull when scrambling for more income, if Brazil’s recent move is anything to go through.
In June, Brazil shaved the tax exception for minors who had earned by crypto and introduced a flat 17.5% tax on all capital obtained from digital ownership, regardless of the amount. Decision is part of a broader effort of the Brazil government to strengthen income by increased taxation of financial markets.
This is more than a local tax tweak. A clear pattern is emerging where governments find ways to get more taxes from the asset class. Worldwide, policy manufacturers view crypto as an income opportunity.
A global pattern begins to appear
Only in 2023 that Portugal brought a 28% tax on crypto acquisitions held less than one year, a significant change for a country that has long been treated Crypto as no tax.
The real question now is how long the countries Crypto-friendly tax policies The line can be held before following the suit, and which one is next to tighten the screws.
For example, Germany shows crypto acquisitions from tax -getting taxed if the property is held for more than a year. Even for handles under one year, those acquired up to 600 euros ($ 686) annually remain taxable.
Meanwhile, the United Kingdom offers a broader 3,000 pounds ($ 3,976) acquired by the capital free tax on all assets, including crypto, although that amount damaged 50% from 6,000 pounds in 2023, which signed a possible additional reduction in the future.
Retail investor gray zone that is close
While this seems like a small change, further reducing the 3,000-pounds threshold can generate significant tax income, especially in recent financial financial (FCA) data showing that 12% of UK adults are now holding a crypto.
It’s hard to imagine that it is completely on the table, especially as the UK government debt increases.
The time of crypto investors enjoying a color -colored regulation zone closing. As the crypto market grows old and prices continue to move forward, governments noticed media titles covering the crypto explosion.
This is especially true in the emerging markets, where governments are under pressure to increase budget gaps without eliminating political backlash from more visible or controversial tax increases.
There is no other asset that matches the average annual return of Bitcoin of 61.2% in the last five years.
Crypto is an easy target for governments
Fortunately, crypto is a reasonable easy target tax for governments. It is often seen as dangerous, speculative and noticed that it benefits the rich. While taxation is not controversial to the public, it also causes a collapse, especially for sunny investors and startups.
Related: Japan’s Crypto Tax Overhaul: What should investors know in 2025
For example, Brazil’s 17.5% structure struck small uninhabited traders.
While large institutions can absorb costs or switch to jurisdictions with more favorable policies, daily users, including crypto users for saving inflation economies, bring costs.
With the rising of odds that other governments will follow the example of Brazil and Portugal, the low tax period or tax -free crypto investment may end.
The question is not whether other countries that are friendly crypto will tighten their crypto taxation; This is how fast and difficult it is.
Opinion by: Robin Singh, CEO of Koinly.
This article is for general information purposes and is not intended to be and should not be done as legal or investment advice. The views, attitudes, and opinions expressed here are unique and do not necessarily reflect or represent the views and opinions of the cointelegraph.
