As more and more regulations are created with regards to cryptocurrency, one of the most complicated is the issue of taxation and how cryptocurrency-related tax should be handled. When cryptocurrency first came on the scene, there was little to no tax code with regards to it and for years, many simply did not declare any tax on the transactions or gains and as those regulations have been developed this issue is being tackled across many countries. This means that for the first time, crypto users across the globe are being given comprehensive guidelines on how to pay their tax as well as consequences for not adhering.
One of the latest of these is from the Department of Federal Revenue (RFB), which is the official tax body of Brazil who has put out a new document stipulating fines that will be imposed on those who fail to report their cryptocurrency-related transactions to the tax authority.
New Tax Laws
This was reported on December 6, 2019, and this new development is in addition to previously-issued tax codes that are part of the Normative Instruction 1,888 issued in May 2019. This requires all Brazilian citizens to report all their crypto transactions to the tax authority. The tax code that has been put in place applies to individuals companies and brokerages and requires them to report all crypto-related activities such as buying, selling, donations, barters, deposits, withdrawals and so on.
Besides the requirements of the declaration of crypto-related transactions, there is also a fine of 500 Brazil reals (BRD) to 1500 BRD, or from $120 to $360 witch will be imposed on those who are found to have not been compliant with this law. This goes to show just how seriously countries around the world are taking the issue of cryptocurrency-related tax, especially since crypto is bound to see an explosion of use in the next few years and as such, the comprehensive tax code needs to be put in place ahead of time.