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Federal Revenue of Brazil requires tax payments on digital currency transactions

Wednesday 1 June 2022 12:22 CET | News

Brazil’s taxation body, the Federal Revenue of Brazil (RFB), has passed a law that will require investors to pay personal income tax when they exchange one digital currency for another.

The declaration was published in the Diário Oficial da União (Official Diary of the Union). The law specifies that even when digital currency transactions do not involve Brazil‘s currency or any other fiat currency, any profit made from the transaction is taxable.

However, the law will not apply to all traders. The RFB caps the reporting requirement at transactions that exceed 35,000 real (about USD 7200). The RFB states that the declaration was made following consultations that began in 2021.

Significantly, the RFB, which is under the Ministry of Economy, has passed the declaration despite protests from a member of the parliament. Kim Kataguiri (Podemos, or the National Labor Party) submitted an opinion to the National Assembly stating that he considers the Federal Revenue’s proposal illegal and unconstitutional.

Brazil has had tax reporting requirements for digital currency investors since 2016. In 2021, the Latin American country began to consider making Bitcoin and other digital currencies legal tender.

In 2022, the Brazilian Senate has approved a bill to regulate digital assets in the country. The bill, which is now waiting to be approved by the president, will place digital currency oversight powers in the hands of the executive arm of government.

The Securities and Exchange Commission (CVM) has already been identified as the body to oversee initial coin offerings (ICO). Regulators for other aspects of the market are yet to be identified, but the bill pages way for a concrete framework to be introduced.

There is speculation that the plans to legalise payment of workers’ salary in digital currencies that was proposed last year may proceed following the signing of the bill into law.


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Keywords: regulation, digital currency, cryptocurrency, transactions , crypto
Categories: DeFi & Crypto & Web3
Companies: Change, Federal Revenue of Brazil (RFB)
Countries: Brazil
This article is part of category

DeFi & Crypto & Web3

Change

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Federal Revenue of Brazil (RFB)

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