In recent years, the cryptocurrency market has grown exponentially, sparking the interest of investors and attracting the attention of tax authorities in Brazil. For those who want to remain compliant with the law and avoid problems with the IRS, understanding the tax obligations related to cryptocurrencies is essential.
Some people think that it is not a good idea to talk about tax declarations for these assets because this would somehow harm the freedom of use. But, contrary to what it seems, it is precisely when there is an understanding that these assets are serious that things tend to move forward around the world.
Want an example of what this means? In recent years, we've seen Bitcoin and Ethereum ETFs, as well as the upcoming terms of Solana. None of this would happen if local legislation didn't recognize the existence of these assets.
So, since there is the recognition of these assets on one hand and the obligation to declare them on the other, what we are going to present to you in this article is the path to doing this in the most appropriate way. Let's go!
How do cryptocurrency rules work in Brazil?
According to the Federal Revenue Service, cryptocurrencies are treated as assets and must be declared on your Income Tax return. Even if you have not sold or transferred assets in the last year, you must declare your ownership if the total value of the cryptos you own exceeds R$5,000. In addition, transactions above R$30,000 must be reported to the agency through the Coleta Nacional system.
Taxation itself occurs if you have sold a certain amount and made a profit on that sale. But don't worry, we'll talk about this in more detail later. The important thing to understand is that, yes, if you only have cryptos, you need to declare them (if the amounts involved are like the ones we just presented).
Step by step guide to declaring cryptocurrencies on your Income Tax return
Organize your financial information
Before starting the declaration, gather all relevant data, such as purchase and sale receipts, exchange statements, amount invested and any gains or losses; with this data, if you are questioned after submitting the declaration, it will be much easier to explain and demonstrate the data presented;Use the correct program
Download the IRS program for filing your Income Tax return. In the form, enter information about your cryptocurrencies in the “Assets and Rights” section.Choose the correct code
To declare cryptocurrencies, use the following codes:08: Bitcoin
89: Other crypto assets (altcoins)
99: Other digital assets (NFTs, for example)
Enter transaction details
In the description of the property, include:Name of exchange used (if applicable)
Quantity purchased
Purchase date
Amount paid at the time
Calculate the tax due on capital gains
If you have made a profit from selling cryptocurrencies, you will need to pay capital gains tax. The rate varies between 15% and 22.5%, depending on the amount of the profit: 15% on profits up to R$5 million, 17.5% for profits between R$5~10 million, 20% if the profits are between R$10~30 million and, if the profits exceed R$30 million, the tax on this capital gain will be 22.5%. However, profits of up to R$35,000 per month are exempt from this tax.Use the GCAP program
If you have taxable income, you must report it in the Capital Gains Calculation Program (GCAP). After filling out the form, the data can be exported to the Income Tax system.
Tips to avoid problems with the IRS
In addition to knowing the practical operations of the declaration, it is worth keeping an eye on some points that can avoid problems:
Record all transactions: Keeping a detailed record of your operations on exchanges and wallets is essential to justify declared values.
Convert amounts to reais: All transactions must be declared in reais, using the official currency rate on the date of the transaction.
Pay attention to the deadline: Capital gains tax must be paid by the last business day of the month following the transaction. Delays may result in fines and interest.
The role of exchanges and platforms in tax compliance
Exchanges operating in Brazil are required to report all transactions made by their customers to the Federal Revenue Service. This means that even if you do not declare your transactions, your operations may be monitored. Therefore, it is essential to keep your records up to date and avoid inconsistencies.
Again: don't think that this has anything to do with “loss of freedom in the use of cryptos”, because ultimately what this means is that locally the authorities recognize the existence and validity of digital assets and this means much more an advance in the adoption of these assets than a restriction of them.
What are the penalties for not declaring cryptocurrencies?
Failure to declare your crypto assets or providing false information can result in fines ranging from 1.5% to 3% of the transaction value. In cases of tax evasion, the taxpayer may face more severe penalties, including legal proceedings.
Now that you know the step-by-step process, be sure to organize yourself to do this in the most appropriate way possible when the time comes to deliver this data.
Regularizing crypto assets through declaration is important beyond avoiding legal problems. A well-structured financial plan helps maximize your earnings and minimize tax costs over time. And, when we look at the long term, this cost reduction makes a lot more difference than it seems.
Could these rules change in 2025?
With the growing popularity of cryptocurrencies, tax rules are expected to become even stricter, mainly to reduce potentially criminal activities that may use cryptocurrencies to occur. In addition, new monitoring mechanisms may be implemented, reinforcing the importance of being up to date with legislation.
Sorry to insist, but let's reinforce: tax regularization is more than a legal obligation: it is an essential step for those who want to invest safely and build a sustainable financial future.
Invest in knowledge, stay up to date with your obligations and take advantage of opportunities in the cryptocurrency market. This combination of actions will bring you great financial rewards in the future.
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