Brazil’s equivalent of the IRS, Receita Federal (RFB), wants to tighten the rules for cryptocurrency exchanges.
The new administrative guidelines were made known when the terms of a public consultation were published in today’s early hours. 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 and the process is seen as an instrument for transparency rather than a software-style RFC procedure. Therefore the text of public consultations is seen by accountants and investors as the probable definitive norm.
According to the proposed text, which can be deployed immediately by RFB without passing new legislation via Congress, a monthly statement shall be presented by crypto exchanges to the tax authority. The tax ID of every trader, whether corporative or physical person, along with their cryptocurrency transactions along with the equivalent value 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.
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 for filing.
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.