The obligation to declare cryptocurrency holdings in income tax returns remains a critical requirement under Normative Instruction No. 1,888/2019 of the Brazilian Federal Revenue Service (RFB).
This regulation, which extends through 2025, requires taxpayers to disclose cryptocurrency assets if the acquisition cost per category exceeds R$6,000. For example, if you own R$5,500 in Bitcoin and R$4,000 in Ethereum, no declaration is required, as both holdings are below the declaration threshold. However, if a taxpayer sells cryptocurrency and the total profit exceeds R$40,000 in a single month, the capital gain must be calculated and the applicable tax paid.
Capital gains are determined by subtracting the purchase price from the sale price, with tax rates ranging from 15% to 22.5%, depending on the profit margin. This tax must be paid by the last business day of the month following the transaction. It is important to note that the R$6,000 limit refers to the acquisition cost and not the current market value or unrealized gains.
Therefore, even if the asset appreciates, it only becomes taxable when monthly sales exceed R$40,000. Peer-to-peer transactions, carried out without intermediaries such as brokers, do not exempt taxpayers from the obligation to declare or pay taxes. Blockchain technology ensures that all transactions are recorded and traceable. The IRS employs advanced tools such as the DeCripto platform to monitor cryptocurrency activities, both nationally and internationally.
To ensure compliance and avoid potential legal issues, taxpayers are advised to keep meticulous records of all cryptocurrency transactions, including purchase and sale prices, dates, and amounts. With increased oversight from the IRS, remaining transparent and adhering to these regulations is essential to protect yourself from financial penalties.
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