As Cointelegraph Brazil reports today, transactionsinvolving cryptocurrencies such as Bitcoin (BTC) must be reported to the IRS inaccordance with rules established by Normative Instruction 1,888 introduced inMay 2019.
As reported by national public news agency Agência Brasil,the new measure applies to individuals, companies and brokerages, and includesall kinds of crypto-related activities, including buying and selling, as wellas donations, barters, deposits, withdrawals and others.
The measure requires entities to provide monthly reports bythe end of the month following the month when crypto-related transactionsoccurred, the report notes. As such, the information for the month of Augustshould be provided until the last business day of September.
According to the rules, local crypto exchanges will have toinform the IRS about all the operations regardless of value. However, those whouse foreign exchanges or brokerages, or make peer-to-peer transactions incrypto, will have to report on the transactions if the monthly amount exceeded30,000 Brazilian reais ($7,800), Cointelegraph Brazil reports.
Penalties range from 1.5% to 3% of the amount of unreportedtransaction
Those who fail to report on their crypto transactions willface penalties ranging from 100 to 500 Brazil reais or from $25 to $130. TheIRS is also authorized to charge from 1.5% to 3% of the amount of theunreported transaction as a penalty, according to Agência Brasil.
The IRS believes that digital currency market in Brazil hasmore investors than Brazil’s second oldest stock exchange, B3, which reportedlyhas about 800,000 customers. By applying the measure, the authority intends tocombat illicit activities such as money laundering, tax evasion and terroristfinancing, the report notes.
Recently, head of the Federation of Industries of the Stateof São Paulo expressed concerns that Brazilians could start using crypto toevade taxes.