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Brazilian-Federal
Brazilian-Federal

Brazilian Federal Revenue Wants Citizens to Pay Crypto Tax

Brazilian Federal Revenue requires investors to pay taxes on cryptocurrency trading profits.

The Brazilian Federal Reserve has stated that Brazilian investors must pay income tax on cryptocurrency transactions.

The RFB’s declaration was published in the Diário Oficial da União. At the end of last year, the group said that trading between cryptocurrency pairs should be taxable.

Since there is no capital gain in fiat currency in exchanging one crypto asset for another, it has to pay taxes on it.

Capital gains calculated from the sale of cryptocurrencies are taxed with the individual’s income tax when one is used directly in the purchase of the other, even if the acquired cryptocurrency has not been previously converted into real or other fiat currency.

He stated that investors trading more than 35,000 BRL must pay income tax.

Capital gains from the sale of cryptocurrencies are exempt from income tax if the total value of one month’s sales of any crypto-asset or virtual currency, regardless of name, is less than or equal to BRL 35,000.00.

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Federal MP Kim Kataguiri views Federal Revenue’s proposal as illegal.

According to Kataguiri, the regulation on the calculation and payment of the IRPF determines that exchanges will only receive capital gains where currency is involved.

Kataguiri:

In exchanges between cryptoassets, there is no exchange involving currency; one crypto-asset is exchanged for another, so there is no share increase

The MP said that under section 110 of the Tax Code, the tax code cannot change the definition of private law institutions and therefore Federal Revenue does not have the power to change an understanding of the Tax Code.

If the union wants to tax the exchange of crypto-assets, legal innovation will be necessary and even then doubts may arise as to the constitutionality of the new law.

Brazilian investors in the cryptocurrency market have been required to declare their crypto holdings to the regulator since 2016. In 2019, the country’s Federal Revenue Service issued Normative Order 1888, which stipulates that all national exchanges must report all cryptocurrency transactions between users.

RELATED : IMF CHAIR CAUTIONS AGAINST ABANDONING CRYPTO AFTER TERRA CRASH

About Hama Amefiz

Amefiz is a professional blockchain, cryptocurrency and tech journalist, regular contributor to newsbsc.com who is writing analysis about the latest developments in the cryptocurrency and blockchain space.

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