The Brazilian equivalent of the IRS, Receita Federal (RFB), wants to tighten the rules for cryptocurrency exchanges.
The new administrative guidelines were released to the public when the terms of a public consultation were published earlier today.
The consultation was opened to request comments from experts about how to deal with tax dodging and money laundering using cryptocurrencies.
Public consultations rarely ever get modified in later stages.
The public consultation process is seen as an instrument for transparency, rather than a software-style RFC procedure.
Therefore, the text of the public consultations will probably undergo few changes before the definitive regulation is published.
Mandatory Monthly Statements
According to the proposed text, which takes effect immediately, without the need for Congressional approval, a mandatory monthly statement of all trading activity must be presented to the tax authority by crypto exchanges.
The tax ID of every trader, whether corporate or individual, along with a detailed statement of their cryptocurrency transactions, including equivalent monetary amounts in local currency (Reais), will have to be reported to RFB.
Part of the idea is to fight money laundering by criminal organizations and to thwart general tax-related infractions.
Crypto Investor Obligations
In Brazil, all cryptocurrency must be reported to the tax authority at the annual tax filing process. All transactions made outside of Brazil will also need to be reported to the government in the same manner, while converting the foreign currency amounts to Reais filing purposes.
While cryptocurrency investors may interpret the new measures as being further state-intervention in the cryptocurrency space, others may perceive these measures as a formal recognition of cryptocurrencies which, slowly, begin to be regulated and integrated into the formal economy.
Brazil has one of the most heavily regulated markets in the world, with bureaucracy being often cited as a generalized problem and as the cause for many business failures in the country.