IRS to review instruction on cryptomorphs

Amendments in IN 1888/2019 could be seen in the next two years.

Brazilian Inland Revenue application
Brazilian Inland Revenue application – Marcello Casal Jr/Agência Brasil

The Brazilian Federal Revenue Service (RFB) is expected to review the current regulation on cryptomorphs, which came into force in 2019 in the country. The information was shared by the National Investment Committee (Coninv), linked to the Ministry of Economy.

Brazil has not yet regulated Bitcoin, either by Bacen or the CVM. Even so, the revenue edited the 1888/2019 Normative Instruction to receive statements related to the cryptomoeda market.

Since then, anyone who trades or transfers Bitcoin, or any other cryptomeda, must declare the action to the RFB. Donations in cryptomoeda, for example, must also be declared.

After more than a year of the first regulatory framework on the subject in Brazil, changes were promised. The action is part of the so-called „Regulatory Agenda for Improving the Investment Environment for the Biennium 2021-2022“.

To create the framework, the government created Coninv Resolution No. 3 of 22 December 2020. With the publication in the Diário da União in recent days, the government indicates that changes should be seen in the sector, and may even comply with international recommendations on the subject.

It is important to highlight that the role of Coninv, under Camex, is to develop and monitor public policy proposals.

Federal Revenue indicates that it will review instruction on cryptomoeda
The Brazilian Inland Revenue is expected to deal with a number of issues over the next two years. With the new resolution, the municipality will have to revise the rules on customs, social security and even cryptomoracs.

On the latter topic, the changes should be in the taxation sector. That is, the way cryptomaps are taxed in Brazil could be changed in the next two years.

Federal Revenue should change cryptomoeda instruction
Inland Revenue to amend instruction on cryptomorphs/Official Journal of the Union
As Brazil has seen growth in cryptomaniac investors, especially in 2020, the sector is going through a heated time. It is not yet clear how the RFB will change the rules imposed still in 2019 and how this affects the domestic market.

In any case, the taxation of cryptomorphs is on the rise worldwide. In the United States, for example, the US Internal Revenue Service already sends a warning to Bitcoin investors.

In addition, GaFi proposes that countries regulate cryptomorphs to prevent crimes like money laundering. With regulations around the world aimed at the sector, Brazil shows that it will also have to adopt rigid systems, and the change in the IRS is a move in this direction.

In Brazil, all Bitcoin brokers already inform the IRS about platform operations. Since instruction 1888/2019 came into force, millions of cryptomyces have already been declared in the country.