An increasingly popular investment among Brazilians, digital currencies do not yet have a specific regulation in Brazil, but are already closely monitored by official bodies. In 2019, the IRS published a rule that defines in which cases it is mandatory to include these cryptocurrencies in the annual income tax return.
According to revenue rules, all investors who had a acquisition value equal to or greater than R$ 5,000 in digital currencies on the last day of the previous year need to declare these assets in the IR. Gain control over your finances: subscribe to our newsletter to receive exclusive content.
The tax is levied on the profit of negotiations that exceed R$ 35,000 per month. Below that, earnings are exempt. The payment of the tax follows the same model of the shares and must be made through Darf until the last business day of the month following the operation.
Check out below how to declare cryptocurrencies in Income Tax.
Important: This text is a way to help you search for information. If in doubt, look for a qualified accountant or professional to assist in your statement. What is cryptocurrency, really?
Cryptocurrencies are digital currencies. In other words, they only exist on the internet, unlike the currencies we already use in our daily life, such as the real, the dollar and the euro, for example.
Cryptocurrencies can also be defined as a kind of decentralized virtual money, i.e. there is no agency or government responsible for brokering, controlling or authorizing the issues and transactions of these currencies.
The technology behind cryptocurrencies is blockchain. Briefly, this system functions as a book where all data is recorded. It allows you to track the sending and receiving of some types of information over the Internet. They are pieces of code generated online that carry connected information, such as data blocks that form a current – hence the name (block = block, chain = chain). Should cryptocurrencies be declared in Income Tax?
The IRS requires that all people who had acquisition value equal to or greater than R$ 5,000 in cryptocurrencies on 12/31/2021 need to report this in the annual income tax return. For taxpayers who had lower values in virtual currencies, the declaration of investment in cryptocurrencies is optional.
The requirement, however, is valid by cryptoactive category. This means that if a person has purchased R$ 5,000 in bitcoin and R$ 2,500 in ethereum, for example, only the bitcoin declaration is mandatory.
The declaration of cryptocurrencies in the IR should be made in reais. In addition, the taxpayer should always consider the acquisition value of the digital currency, not the market value. That is, declare how much you paid for the cryptocurrency. What tax is charged for cryptocurrencies?
It is necessary to pay tax on profits with cryptocurrencies whenever the negotiations add up to more than R$ 35,000 per month, considering all cryptocurrencies and transactions carried out in any country.
That is, if, for example, in the same month you sold R $ 10 thousand bitcoin in Brazil, R $ 5,000 ethereum via broker of the United States and R $ 21 thousand tether through a broker in England, you pay tax. This is because the total value of trades in a month exceeded R$ 35,000 in cryptos.
For virtual currency transactions with values below R$ 35,000, profits are exempt from IR. However, even if they are exempt, these assets must be in the annual statement whenever the value on the last day of the year is greater than or equal to R$ 5,000.
In addition, if you have traded cryptocurrencies through an exchange abroad or through a transaction that does not involve an exchange, with the monthly value of the transactions, isolated or jointly, greater than R$ 30,000, it is necessary to fill out a statement to the Irs.
Check below the income tax rates that focus on the profit of cryptocurrency transactions: IncomeRate Below R$ 5 million15%Between R$ 5 million and R$ 10 million17.5%Between R$ 10 million and R$ 30 million20%Above R$ 30 million22.5%
As with many variable income investments, for example stocks, it is the investor himself who must calculate monthly earnings with cryptocurrencies, issue the Darf (Federal Revenue Collection Document), calculate and pay the tax. And this should be done monthly. See more details about this below.
How to issue and pay DARF for stocks and other investmentsHow to declare cryptocurrencies in Income Tax?
Cryptocurrencies must be declared on the “Goods and Rights” form of the Revenue system. To do this, simply search for the group “08 – Cryptoativos” and use the codes according to the digital currency you have:
- 01 – Bitcoin Cryptoactive (BTC);
- 02 – Other cryptocurrencies, known as altcoins, e.g. Ether (ETH), Ripple (XRP), Bitcoin Cash (BCH) and Litecoin (LTC);
- 03 – Cryptoactives known as stablecoins, e.g. Tether (USDT), USD Coin (USDC), Brazilian Digital Token (BRZ), Binance USD (BUSD), DAI, True USD (TUSD), Gemini USD (GUSD), Paxos USD (PAX), Paxos Gold (PAXG) etc;
- 10 – Cryptoactives known as NFTS (NonFungible Tokens);
- 99 – Other cryptoactives.
As with other investments, the amount to be reported is the acquisition value added to the costs (e.g. fees and other fees). Enter in “Discrimination” what is the cryptocurrency, quantity, name and CNPJ of the company that is saving (custody) of its cryptos.
Also, please report the different cryptoasset types separately. For example: Bitcoin, Ether, XRP, Chainlink, Litecoin, Tether.
If custody is its own, it is necessary to inform the model of the digital wallet where the cryptocurrencies are.
All people who had monthly profits of less than R$ 35,000 must report the movement in the form “Exempt and non-taxable income”. Report the total profit you had in the year with the code “05 – Capital gain on the disposal of good”. How to pay tax on profit with digital currencies?
The statement of profits with cryptocurrencies should be monthly. Those who operate cryptocurrencies are responsible for calculating the results of the month and collecting income tax. Next it is necessary to send the Darf and make the payment of the tax until the last business day of the month following the operation.
Click here to see how to calculate the tax and issue the Darf.
In addition, it must record the gains in GCAP, the irs’ capital gains calculation program. For the declaration, you need to import the information from this program.
Simply access the GCAP 2021 program, select the “Export to IRPF” option, and save the file to your computer.
In the IR program, go to the “Capital Gains” tab, select the “GCAP Import” option, and import the file you saved.
Important: The text above is a way to help you search for information. If in doubt, look for a qualified accountant or professional to assist in your statement.
How to declare variable income investments in Income Tax?
How to declare variable income investments in Income Tax?
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