Brazilian Tax Service obliged citizens to report cryptocurrency transactions on August 1

From August 1, Brazilian citizens are required to report their cryptocurrency transactions to the country’s tax authority, the Federal Revenue Department (RFB).

According to
the national news agency Agência Brasil, information on all transactions using cryptocurrencies should now be transmitted to the RFB in accordance with the rules established by regulation 1888 presented
in may 2019.

The new rule applies to individuals, companies and brokerage firms and includes all types of cryptocurrency activities, including buying and selling, as well as donations, barter, deposits, withdrawals and other operations.

According to the new rules, local cryptocurrency exchanges will have to inform RFB of all transactions, regardless of their size. At the same time, those who use foreign exchanges or brokerage houses, or make P2P transactions, must file reports if the monthly amount of these transfers exceeds 30,000 Brazilian reais ($ 7,800).

Violators will be subject to fines ranging from $ 25 to $ 130. According to Agência Brasil, RFB is also authorized to charge a penalty of between 1.5% and 3% of the amount of an unregistered transaction. RFB estimates that there are more investors in Brazil’s digital currency market than Brazil’s second oldest stock exchange, B3, which has about 800,000 customers.

By taking new measures, the authorities intend to fight illegal activities, such as money laundering, tax evasion and the financing of terrorism, the publication says.

Recently, the President of the Federation of Industry of the State of Sao Paulo (FIESP) Paulo Skaf expressed
fears that Brazilians may start using cryptocurrencies to evade taxes after adopting a new regulation.