Cryptocurrency transactions fall on to the Brazilian Federal Revenue’s radar

International Tax Review is part of Legal Benchmarking Limited, 1-2 Paris Garden, London, SE1 8ND

Copyright © Legal Benchmarking Limited and its affiliated companies 2025

Accessibility | Terms of Use | Privacy Policy | Modern Slavery Statement

Cryptocurrency transactions fall on to the Brazilian Federal Revenue’s radar

Sponsored by

pinheirologo.png
1e1d81ed-c359-4e45-a5e5-0304b912e60c19-digital-economy-we-need-to-talk-about-platforms.jpg

Ricardo Luiz Becker and Fabio Tarandach of Pinheiro Neto explore how tax authorities are quickly evolving to regulate Brazil’s surging cryptocurrency market.

Just like several countries across the world, cryptocurrency transactions in Brazil have become increasingly important day by day. Whether as a new form of payment (as a substitute to the conventional payment types such as cash or cards), or whether as a form of investment (given the valuation of the cryptocurrency unit), the fact is that cryptocurrency transactions have grown to earn relevance in the Brazilian market.

Brazilian tax law has no legal specific act concerning the taxation of cryptocurrency operations, so transactions involving virtual currencies are currently subject to the same taxation as transactions with different classes of assets. The taxation will follow the set guidelines: (1) the revenue obtained with the settlement in cryptocurrency should be regularly taxed; (2) an entity that settles an obligation with the use of cryptocurrencies should withhold the applicable taxes; and (3) the capital gains earned with the sale of cryptocurrency should be taxed as well.




Nevertheless, until a few months ago, there was no rule foreseeing how these transactions should be brought to the attention of the authorities. Thus in practical terms, the Federal Revenue did not have the resources or tools to collect taxes over these transactions. Since cryptocurrency transactions were becoming more valuable, the Brazilian Federal Revenue (RFB) chose not to ignore this situation.



In this sense, the RFB issued the Normative Instruction Nº 1,888/19 (IN 1,888/19) which determines that all cryptocurrency transactions are properly informed to the authorities by Brazilian exchange brokerage firms (exchanges), by individuals or legal entities owning the crypto assets, depending on the case. 



There are many reporting requirements established under IN 1,888/19, such as date and number of encrypted transactions; description of individuals or companies that were parts in the transaction; type of cryptocurrency transferred; operation’s value; value of the service fees; and address of the delivery and receipt wallet. Moreover, a penalty of 3% is foreseen in cases in which the information provided to the authorities is inaccurate, incomplete or incorrect.



In our view, the new obligations (IN 1,888/19) bring a new perspective to Brazilian public finance and a new scenario to all the players of this market. In accordance to the last information provided by the RFB, in the first two months that the new rule has been in force, the total amount informed to the authorities was around BRL 14 billion. In other words, if the Brazilian tax authorities intend to keep up with controlling cryptocurrency transactions, and tax it, there will be a free way ahead.

more across site & shared bottom lb ros

More from across our site

Dolphin Drilling intends to discuss the final liability amount and manner of settlement with HM Revenue and Customs
Winning the case against the 20% VAT imposition was always going to be an uphill challenge for the claimants, UK tax advisers argue
A ‘paradigm shift’ in Chile’s tax enforcement requires compliance architecture built on proactive governance, strategic documentation and active monitoring of judicial developments
Paul Monaghan, CEO of the Fair Tax Foundation, digs into where companies are going wrong with CbCR, the ‘Russia question’, and shares new data exclusively with ITR
The long-awaited overhaul of Brazil’s tax systems will cause uncertainty for businesses. Experts from Lavez Coutinho argue it is essential for company leaders to get ahead of the issues
‘KPMG Workbench’ has a network of 50 AI assistants and chatbots that will assist clients; in other news, Baker McKenzie hired a former US deputy attorney general and tax disputes expert
The UK tax agency reported that the total estimated tax gap for the 2023/24 tax year is £46.8 billion
The case shows that legal relationships between parties bear significance and should be given sufficient weight in TP analyses, one local adviser says
Burford Capital said it hopes that the US Congress will not ‘set back’ business growth and innovation by introducing a tax on litigation funding profits
The new framework simplifies the process of relocating eligible employees to Luxembourg and offers a ‘clear and streamlined benefit’, says Alexandra Clouté of Ashurst
Gift this article