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

The US president also unveiled a new 50% levy on copper imports; in other news, a UK wealth tax proposal has been criticised by the Institute for Fiscal Studies
Wim Wuyts, who had been head of the specialist tax network since 2017, is moving on to a new role with WTS’s Belgian member firm
MNEs are increasingly using algorithmic tools in TP. Sahasranshu Dash argues that data ethics should therefore plug directly into the TP design process
The Institute of Chartered Accountants in England and Wales also queried whether HMRC resources could be better spent scrutinising larger entities
Grant Thornton’s Austria tax head likens his practice to an escape room, shares his football coaching ambitions, and explains why tax is cool
Awards
ITR is delighted to reveal all the shortlisted nominees for the 2025 EMEA Tax Awards
Awards
ITR is delighted to reveal all the shortlisted nominees for the 2025 Asia-Pacific Tax Awards
The fates of pillars one and two hang in the balance after the US successfully threw its weight around in G7 and Canadian negotiations
Rafael Tena tells ITR about the ‘crazy’ Mexican market, ditching the hourly rate, and refusing to grow his fledgling firm in an ‘unstructured way’
It should be easy for advisers to be transparent about costs, Brown Rudnick partner Matthew Sharp said in response to exclusive ITR in-house data
Gift this article