Guide to Crypto Taxes in Brazil for 2024

The Federal Revenue Service (RFB) oversees Brazil crypto taxes and recognizes cryptocurrencies as taxable assets in Brazil. This means that any profit derived from the sale or trading of cryptocurrencies is subject to capital gains tax. However, you only need to pay this tax if your total disposals exceed R$35,000 within a month. No capital gains tax is due if your transactions remain below this threshold.

Understanding the conditions under which these taxes apply is crucial for compliance. The RFB uses advanced technology, including artificial intelligence, to monitor blockchain transactions to prevent and detect tax evasion. This transparency ensures that all taxable events are traceable and accountable.

Brazlian crypto taxes, as in other countries, are determined by what the tax authority considers a taxable event. Taxable events for Brazil crypto taxes include selling cryptocurrencies for fiat, trading one cryptocurrency for another, and using cryptocurrencies to pay for goods or services. Each transaction can trigger a capital gains event, requiring careful calculation and reporting of potential profits or losses.

Conversely, certain activities, such as buying cryptocurrencies with fiat money or transferring digital assets between your wallets, are not taxable. However, it’s essential to maintain detailed records of these transactions as they can affect your tax calculations when you decide to sell or trade your holdings.

Capital gains tax on crypto in Brazil

Capital gains tax on cryptocurrencies in Brazil is calculated based on the profit made from each transaction. The rates vary from 15% to 22.5%, depending on the total capital gains accrued throughout the year. This progressive tax rate encourages transparency and proper reporting of all transactions.

To calculate your capital gains, subtract the purchase price of your crypto from its selling price at the time of disposal. If you engage in multiple transactions, you may need to use a crypto accounting method such as FIFO (First-In, First-Out) or ACB (Average Cost Basis) to determine the purchase price.

Income tax from crypto activities in Brazil

Receiving crypto as payment for services or goods or from crypto mining activities is considered income and is taxed according to regular income tax rates ranging from 7.5% to 27.5%. These activities are classified differently from capital gains and require separate reporting in your tax filings.

It’s vital to differentiate between hobbyist activities and business operations, as this can influence the tax rate applied. Business activities typically face higher tax rates and more stringent reporting requirements.

Brazilian taxpayers must report their cryptocurrency profits through their annual personal income tax return. Additionally, if the value of the crypto transactions exceeds R$30,000 in a month outside Brazilian exchanges, a monthly statement of cryptocurrency operations must be submitted before the end of the following month.

The primary forms used for reporting are the annual personal income tax return and the annual capital gains statement. Each form declares different aspects of your financial interactions with cryptocurrencies within the fiscal year.

The Brazilian tax year aligns with the calendar year, ending on December 31st. All tax payments and reports for income and capital gains from cryptocurrencies are due by the last working day of April of the following year. Marking these dates in your calendar is critical to avoid interest and penalties on late payments.

Calculating your tax obligations can be complex, especially when you engage in multiple transactions across various platforms. Crypto tax software like ours at TokenTax is highly recommended, as it allows you to track your transactions and calculate your taxes accurately and efficiently. This simplifies your reporting and ensures compliance with Brazilian crypto taxes.

Our free crypto profit calculator can be a great place to begin. When in doubt, consult with a crypto tax professional for further guidance.

Here are answers to frequently asked questions about Brazil crypto taxes.

Can the RFB track my cryptocurrency transactions?

Yes, the RFB can track cryptocurrency transactions through blockchain analysis and other technological means to ensure tax compliance.

What happens if I don't report Brazil crypto taxes?

If you don’t file crypto taxes, you can suffer significant penalties, including fines and interest on unpaid taxes. In severe cases, legal action could be initiated.

Are there any deductions available for crypto investors?

Currently, Brazil does not offer specific deductions for cryptocurrency investments. However, any costs related to the acquisition or sale of cryptocurrencies, such as fees or commissions, can be included in the cost basis to reduce capital gains.

How do I pay taxes on mined cryptocurrencies?

Income from mining is taxed as regular income in Brazil. You should report the fair market value of the mined cryptocurrencies when they are received as part of your income tax return.