Brazil’s Tax Authority to Summon Foreign Crypto Exchanges

Brazil Intensifies Efforts to Ensure Tax Compliance Among Crypto Traders
Brazil’s Tax Authority to Summon Foreign Crypto Exchanges

Brazil’s Federal Revenue (Receita Federal do Brasil) is set to issue an ordinance this week requiring foreign cryptocurrency exchanges to provide detailed information on their operations within the country. This move aims to uncover potential illegal activities and ensure that Brazilian citizens comply with new tax regulations.

Andrea Chaves, Deputy Secretary of Inspection, stated the need to understand how these exchanges operate and verify the legality of their transactions. Previously, only local exchanges were mandated to report transactions. The new ordinance extends this requirement to foreign platforms to capture a comprehensive view of Brazilian wealth subject to taxation.

In December 2023, Brazil enacted a law imposing a 15% income tax on cryptocurrency profits and dividends earned on foreign exchanges. The tax authority anticipates collecting around $4 billion (20 billion Brazilian reals) in the 2024 fiscal year.

Prominent exchanges like Binance, Coinbase, OKX, and KuCoin operate in Brazil. Binance, holding 79% of the market share, has faced increased competition from local and regional platforms like Mercado Bitcoin and Bitso. From January to May 2024, Brazil’s cryptocurrency trading volume surged 30% year-on-year to $6 billion.

Stablecoin transfers remain the predominant source of crypto activity in Brazil. The country's regulatory measures reflect the growing importance of cryptocurrency in its financial landscape, aiming to ensure transparency and compliance.

Disclaimer: Please note that the information provided in this article is based on the referenced research articles. It is essential to conduct further research and analysis before making any investment decisions. The cryptocurrency market is highly volatile, and investors should exercise caution and consult with financial professionals before engaging in cryptocurrency trading or investment activities.

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