Rio de Janeiro to Set Crypto for Property Tax
- From 2023, Rio de Janeiro will allow local taxpayers to pay property tax in crypto.
- Locals are allowed to pay their taxes in more than one cryptocurrency.
- Companies seeking to provide this service have been urged to comply with the Brazilian SEC and register with local authorities.
Cryptocurrency has enjoyed a growing adoption in South America, especially in Brazil, where locals leverage crypto assets as a hedge against inflation and for remittance and savings. In a new development, the Brazilian city of Rio de Janeiro has announced that crypto-holding residents will be allowed to pay for their property tax in crypto from 2023. Following the move, Rio de Janeiro has become the first Brazilian city to accept cryptocurrency for tax.
The city indicated that more types of taxes would be possible in the future. However, residents are expected to be able to pay their taxes with more than one cryptocurrency asset.
A recently published decree urged companies willing to provide the service to adhere to regulations from the Brazilian SEC and register with local authorities. Furthermore, the contracted businesses will offer cryptocurrency payment services and perform cryptocurrency to fiat currency conversions. In addition, taxpayers will not incur any additional costs as funds will be remitted to the city in domestic fiat currency.
The initiative was headed by Rio de Janeiro’s crypto-supporting mayor, Eduardo Paes, who earlier this year said he was exploring ways to allow Rio to start keeping cryptocurrencies in its treasury. Giving further information on the story, Mayor Eduardo Paes said,
Rio de Janeiro is a global city. Therefore, we are following technology and economic advances in the universe of digital financial assets. We have a look to the future and we want to become the country’s capital of innovation and technology. Our city is the first in Brazil to offer the taxpayer this type of payment.
Paes claimed that Rio was ahead of a few other Brazilian regions, also considering tax payment systems driven by cryptocurrencies. Rio de Janeiro’s bid to use crypto for tax reflects the general sentiment in Brazil. The South American country sees digital assets as a part of its economy and is working towards increasing adoption.
Brazil has also become a target of many foreign crypto projects hoping to leverage the citizen’s interests. However, the country has an equal number of local projects. Data from local tax body Receita Federal do Brasil showed that the number of businesses holding cryptocurrencies in Brazil has just reached new highs. The agency said it recorded over 12,000 different organizations with crypto on their balance sheets in August.
Rio de Janeiro joins the growing number of states around the world that are bracing up to engage cryptocurrencies for tax. For example, the US state of Colorado began accepting cryptocurrency as payment for any unpaid taxes in September. Other states like Utah, Wyoming, and Arizona are working on different bills to accept tax payments in digital currencies.