Brazil’s regulators want to crack down on crypto tax evasion

As the Bitcoin ecosystem continues to take shape, at least in some parts of the world, countries are introducing regulations to guide it responsibly into the future. The G20 is close to introducing regulations to cover certain financial aspects of the currency and so is France. Brazil is looking to help with the process, as well, and has announced new regulations that could have tax implications for crypto enthusiasts across the country. 

A new law has been introduced that would allow the Department of Federal Revenue of Brazil, the country’s tax authority, to collect information from crypto exchanges regarding users and their transactions. The result would be a system that could help prevent tax evasion and which could put more revenue into Brazil’s government.

The law takes effect this September, so Brazilian crypto fans are most likely already scrambling to figure out how to avoid the new restrictions. However, they are going to be offered a free pass by the country’s government. Traders will be responsible for reporting trading volumes on foreign platforms that exceed $8,000. Everything else will be automatically reported by the crypto exchanges in the country.

In addition to the transaction volume, exchanges have to provide the nationality of the crypto holder, where they reside, their registration number, the crypto assets involved in the transaction, the amount and other details. In addition, the amount of fees paid has to be included, possibly as a way to accurately calculate tax liabilities. The information has to be submitted by the end of the month following the month when the transactions took place. In other words, when the law begins in September, exchanges will be reporting on all transactions from August.

Brazil is trying to clean up its crypto image. It has formed a committee to create regulations for digital assets. That move came following a series of fraudulent activity in the Bitcoin Space over the past year, including one involving Bitcoin Bank Group (BBG). Users of BBG’s crypto platform have launched numerous lawsuits, arguing that they have not been able to withdraw their funds from the platform. There have also been reports of crypto mining activity tied to drug traffickers, money launderers and more.