Tax Authority in Brazil Going After Crypto Profits
The RFB has announced in a document some policies and guidelines that will demand that crypto traders share their real identities and provide financial reports every month to the related authority.
New Tax Procedures for Cryptos
In the document, it is noted that all digital crypto exchange platforms in Brazil are obligated to give reports on a monthly basis, that includes any updates with regards to financial achievements and this information should includethe personal data of any dealers.
These rules were put in place for tax purposes and also to avoid any alleged laundering of money. The RFB has also stated that this step should help to provide transparency as well as more confidence within the crypto sector, which has grown exceptionally over the last 5 years, as today the number of investors of cryptocurrencies has surpassed greatly that of individuals trading in stocks on the B3 exchange.
No More Anonymity
These procedures by default mean that crypto traders will not be able to continue operating anonymously. The authority claims that because, until now, individuals were able to trade in cryptos without sharing any of their personal information, criminals and those who wanted to evade taxes would use these platforms to circumvent the authorities.
The RFB also mentioned that individuals or companies in Brazil that make transactions that are over 10,000 reals, around $2,700, on foreign exchange platforms every month are obligated to share this information with the tax authority. If any individual wasn’t able to follow these rules and as a result delayed any taxes would have to pay a fine of $400, and a 3% fee of the Tx value would also be imposed on any individual who declares false information about their current incomes or submits incomplete information.
The Crypto Industry Is Growing in Brazil
The total value of cryptos traded on exchange platforms in Brazil has continuously grown from $12.1 million back in 2014 reaching $2.24 billion as last year came to an end, in an industry that flourishes in anonymity and a lack of regulations.
The RFB has also guided trading volumes that reached a range of $4.86-$12.15 billion in 2018. The authority stated that these statistics show the importance of the industry in Brazil and that fighting anonymity, which is the opposite of what attracts most individuals, is crucial.
The tax authority will be analyzing any input coming from the public regarding these guidelines until 19 November. These regulations have been put in place just as a judge forced two major banks in Brazil to reactivate the bank accounts of leading crypto exchange platform BTC Max, which were shut down last September without any notice or explanation. The banks had to reopen the accounts or pay a fine that could reach $5,400.