Federal Revenue also cited tax exemption for monthly sales of up to R$ 35 thousand.
Any capital gain of an individual involving cryptocurrencies must be declared to the Internal Revenue Service (RF). And not just the exchange of cryptoactives for reais, as most of those who have these assets understood. The clarification is in a response from the institution to a question it received to clarify a doubt.
According to the answer that RF released last Thursday (23), “the capital gain determined on the sale of cryptocurrencies, “when one is directly used in the acquisition of another, even if the acquisition cryptocurrency is not previously converted into reais or another fiat currency, it is taxed by the individual’s income tax .”
In addition, it is “subject to progressive rates, in accordance with the provisions of art. 21 of Law No. 8981, of January 20, 1995”. This is tax legislation and the article cites tax rates on capital gains. The percentages are 15% for earnings of up to R$5 million and 17.5% for earnings above R$5 million to up to R$10 million.
After that, the percentage rises to 20% for earnings that exceed R$ 10 million and go up to R$ 30 million. Above that, it is 22.5%. The tax exemption occurs when up to R$35,000 in cryptocurrencies are sold.
IRS indicates which rules are for declaring cryptocurrencies
However, many rely on Normative Instruction (IN) 1,888 of 2019 to file income tax returns on transactions with cryptocurrencies on exchanges. The IRS does not indicate this instruction in its response.
The IN handles information to the Revenue on transactions by exchanges and individuals and legal entities. And it covers various operations, such as buying and selling, bartering, donating, transferring to and withdrawing from exchange, renting, issuing. debt payment, as well as “other operations involving the transfer of cryptoactives”.
In order to provide the RF with information, the 2019 IN establishes that the value of the cryptoactive in foreign currency must be converted to the United States dollar. And in reais. The information that the RF must receive includes, for example, the date of the operation, the type of operation, which are the cryptoactives and the quantities involved. In relation to the value, the institution refers to what was changed into reais, without service fees, and to these fees, separately.
In the response that the RF released last week, the agency also indicates the documents that are the basis for making the declaration. A parte a lei 8.981, there is also the Regulation on Income Tax and Income of Any Nature (RIR) in Decree 9,580 of 2018. And also IN 1,500 of 2014 and 118 of 2000. The professional who signed the document is Fernando Mombelli, general coordinator of institution.