Brazil’s tax authority will ask foreign crypto exchanges for information about clients and operations

The country’s tax on crypto income has been set at 15% since the beginning of the year

19.06.2024 - 10:10

139

2 min

What’s new? The Brazilian Tax Authority has issued a ruling to conduct an audit aimed at identifying illegal activities and tax debts among citizens. As part of the audit, it will request information from foreign crypto exchanges to determine whether citizens are complying with the new tax laws.

Material by Reuters

What else is known? Last December, Brazil passed a law requiring citizens to pay a 15% income tax on cryptocurrency profits and dividends earned on foreign exchanges.

The country saw a surge in crypto trading in the first months of 2024, with volumes growing 30% year-on-year to reach $6 billion between January and May. Stablecoin transfers remain the main source of cryptocurrency activity in Brazil.

Analysts at Kaiko said in a recent report that Brazil is the largest player in Latin America and seventh in the world.

Binance, Coinbase, OKX, and KuCoin are among the most popular in the country. Binance has the largest market share (79% of all transactions), although in recent months it has been partially behind the largest local platform Mercado Bitcoin, and Mexico’s Bitso. Their combined share reached 21% in early May, the highest in more than three years.

According to Reuters, the Tax Authority is expected to publish a ruling this week asking foreign exchanges to provide additional information about their transactions and cooperation with local service providers.

That said, unlike exchanges established in Brazil, foreign platforms are not required to report their transactions.

From January to July 2023, Brazilians declared 133,6 billion Brazilian reals ($24,6 billion) in crypto assets, up 36,6% year-on-year. Of this amount, 14,5 billion Brazilian reals is linked to foreign exchanges: 51,2% more than a year ago.

Author: