The Internal Revenue Service (IRS) in Brazil has established a specified code to categorize punishment for taxpaying citizens who fail to declare their cryptocurrency operations and holdings. This can be seen as Brazil’s major attempt to take a stronger control over the Bitcoin(BTC)trade and other digital currencies trade and exchange in the country.
The new rules have already been enforced in Brazil as per the Federal Official Gazette’s publication of the briefings of the executive act on December 6th. The script further elaborated the details of the new cryptocurrency rules, and according to which:
“Revenue code 5720 – Default for Default / Incorrect / Delay in Reporting on Transactions Performed with Crypto for the use of the Federal Revenue Collection Document (Darf).”
Previously in Brazil, the only regulation piece regarding the use or storage of cryptocurrency was the Normative Instruction 1888. It has been in force since August of this year and is the basic structure to monitor crypto activities in the country. The newly introduced code is seen as an extension or complementary to the Normative Instruction.
Based on the report of the Brazilian IRS, In Brazil there have been about $14 billion worth of cryptocurrency transactions including the largest one by market capitalization Bitcoin and its other contemporaries. The data is based on the previous two months alone and is expected to increase as the popularity of crypto transactions increase in the country.
Experts and cryptocurrency market actors have been investigating how the figures released by the IRS were obtained. Aside from the new Revenue Instruction, Brazil’s congress has been looking at ways to regulate cryptocurrency sector in the country by undertaking various projects. However, due to ongoing debate, their approval still seems to be far from final ratification.
Crypto Operations Should Be Reported on a Monthly Basis
Crypto transactions and other associated information should now be made available to the IRS on monthly basis and has to include the proceedings of the operations from the month before. For example, November operations will be declared on December report and so on.
The government has advised all its legal citizens to make proper statements about their cryptocurrency holdings, this includes all the individuals and legal residents who are domiciled in Brazil and are moving a total accumulated amount of over 30,000 reals in crypto (about $7,200) every single month.
The information required by the Brazilian IRS is: identification of the holder and the initiator of the transaction, transaction value in Brazil’s national currency, the amount of cryptocurrency traded and the date of the operation.