Wondering how your cryptocurrency is taxed in Brazil? In this guide, we’ll cover everything you need to know about how the RFB taxes crypto — including how much tax you’ll pay on crypto and the specific forms you’ll need to fill out!
Do you have to pay crypto tax in Brazil?
Profits from selling and trading away crypto are subject to capital gains tax in Brazil.
You will only be required to pay capital gains tax if the total value of your disposals exceeds R$35,000 in a month. If your total monthly profits are less than R$35,000, there is no capital gains tax liability.
What are the crypto tax rates in Brazil?
In Brazil, income tax ranges from 7.5% - 27.5%.
Capital gains tax ranges from 15-22.5% depending on your total amount of capital gains during the year.
Can RFB track crypto?
It’s important to remember that all transactions on blockchains like Bitcoin and Ethereum are publicly visible and permanent.
The Federal Revenue Service (RFB) has stated that the agency uses artificial intelligence to analyze the blockchain and prevent Bitcoin and cryptocurrency tax evasion.
When is the deadline for reporting my crypto taxes in Brazil?
In Brazil, the tax year runs from January 1 - December 31.
Your taxes are due on the last working day of April. You’ll be required to report your cryptocurrency profits and your other capital gains alongside any relevant income from the year — including income from your job.
If the value of your cryptocurrency transactions outside of Brazilian exchanges exceeds R$30,000 in a month, you are required to fill out a monthly statement of cryptocurrency operations. This should be filled out before the end of the last working day of the month.
How is tax on crypto calculated in Brazil?
To determine your capital gain or loss on a cryptocurrency transaction, you can use the following formula.
Capital Gain/Loss = Sales Price - Purchase Price
The sales price is the fair market value of your cryptocurrency at the time of disposal. Meanwhile, your purchase price is the fair market value of your crypto at the time of receipt.
How do I calculate my purchase price if I bought my crypto at multiple price points?
If you bought your cryptocurrency at multiple price points, you’ll need to use an accounting method to calculate your purchase price for cryptocurrency. You have the option to use FIFO (first-in first-out) or ACB (average cost basis).
FIFO: The first unit of cryptocurrency you acquire is the first you dispose of.
ACB: The purchase price of your cryptocurrency is the average price of all the cryptocurrency you acquired.
Example: FIFO vs. ACB
Caio buys 1 ETH for R$3,000. Later, he buys 1 ETH for R$ 3,500.
Later, he disposes of 1 ETH for R$3,200.
Using the FIFO method, the first cryptocurrency acquired is the first cryptocurrency disposed of. In this case, Caio’s purchase price is $3,000. His total capital gain would be $200 ($3,200 - $3,000).
Using the ACB method, Caio’s purchase price is the average cost of all of his ETH. In this case, his purchase price is R$3,250 ((3,000 + 3,500)/2) . He would have a capital loss of $50 (3,200 - 3,250).
What crypto transactions are taxable in Brazil?
Unfortunately, the RFB’s guidance on cryptocurrency is limited — it’s still not clear how transactions like staking, mining, and airdrops are taxed. It’s likely that the following transactions are considered taxable in Brazil.
- Selling crypto: Subject to capital gains tax!
- Trading one crypto for another crypto: Subject to capital gains tax!
- Receiving cryptocurrency as payment: Subject to income tax!
What crypto transactions are tax-free in Brazil?
The following transactions are not subject to tax in Brazil.
- Buying cryptocurrency with fiat currency: While buying cryptocurrency with fiat currency is not taxable, you are required to report all crypto-assets with an acquisition cost above R$5,000 on your tax return.
- Moving cryptocurrency between wallets that you own: Moving cryptocurrency between wallets you own is not considered taxable in Brazil. However, you should keep records of these transactions so you can easily calculate your capital gain in the case of a future disposal.
How are NFTs taxed in Brazil?
At this time, the RFB has not released any guidance on how NFTs are taxed in Brazil. It’s likely that NFTs will be taxed similarly to other crypto-assets.
When you dispose of an NFT, you’ll likely incur a capital gain or loss depending on how the price of your NFT has changed since you originally received it.
Buying an NFT with cryptocurrency is likely considered a disposal of your crypto. You’ll likely incur a capital gain or loss depending on how the price of your crypto has changed since you originally received it.
How to report crypto taxes in Brazil
You can report your crypto taxes on your eCac online portal. You may need to submit the following forms.
Personal income tax return
Your personal income tax return is where you report your income from all sources during the tax year — including income from your work. This should be submitted before the end of the last working day of April.
Cryptocurrencies with an acquisition cost above R$5,000 should be declared as an asset on your annual income tax return. If you do not have any crypto-assets with an acquisition cost above R$5,000, there is no need to declare your crypto on your income tax return.
Annual capital gains statement
You are required to report your capital gains from cryptocurrency on your annual capital gains statement.
If you made a profit on capital gains during the month, you are required to report this on your capital gains statement — regardless of whether the total amount sold exceeded R$35,000 in a month.
However, you will only pay tax if your total monthly profit exceeds R$35,000.
If you didn’t make a profit, you are not required to fill out a capital gains statement.
Monthly statement of cryptocurrency operations
As stated earlier, you will be required to submit a monthly statement of cryptocurrency operations within the same month if your total transaction volume outside of Brazilian exchanges exceeds R$35,000. This does not include transactions made on Brazilian-based exchanges like Mercado Bitcoin.
You are required to submit this monthly statement before the end of the last working day of the month.
What records should I keep for crypto taxes in Brazil?
You should keep detailed records of your cryptocurrency transactions to accurately report your taxes. This should include:
- The type of crypto involved in the transaction
- The date of the transaction
- How much crypto was involved in the transaction
- The fair market value of your crypto (in BRL) at the time of the transaction
- Exchange records
It may be difficult to keep track of this information on your own — especially if you are using multiple wallets and exchanges. You can use crypto tax software to keep track of this information automatically.
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