The declaration stated that only those shareholders who trade over BRL 35,000, estimated at $7263.67, in crypto will have to pay taxes.
On May 24, Brazil’s Federal Reserve (RFB) announced that Brazilian traders in the crypto industry will have to pay taxes from the transactions that include various cryptocurrencies, including Ethereum (ETH) and Bitcoin (BTC).
According to the official announcement, such a decision was made after one of Brazil’s organizations turned to RFB last year and declared that exchanges in crypto must be taxed even if there is no conversion to the Brazilian Real (BRL).
Did you know?
Want to get smarter & wealthier with crypto?
Subscribe - We publish new crypto explainer videos every week!
10 Biggest Crypto Scams & How to Avoid Them (ANIMATED)
Even though it is not yet clear what is considered income as there is no capital gain in fiat money when exchanging one cryptocurrency asset for another, RFB still states that paying taxes on the future profit is a must.
"The capital gain calculated on the sale of cryptocurrencies, when one is directly used in the acquisition of another, even if the acquisition cryptocurrency is not previously converted into reais or another fiat currency, is taxed by the individual's income tax."
Earlier this year, a Brazilian politician and member of the Chamber of Deputies of Brazil Kim Kataguiri announced that RFB’s plan is illegitimate and that such regulation should not be implemented in the country.
Kataguiri expanded on the statement and implied that payment of IRPF and the law applied to the calculation show that capital gain will only be realized in trades involving currency. However, it is exactly the opposite when exchanging crypto-related assets.
There is no trade involving currency in the exchange of crypto assets - one crypto asset is traded for another, meaning that there is no equity rise, Kataguiri mentioned.
"If the Union wants to tax the exchange of crypto-assets, legal innovation will be necessary and, even in this case, doubts may be raised about the constitutionality of the new law. What we have is a completely illegal interpretation made by the tax authorities, which clearly exceeds the power to regulate.”
In other news, the biggest fintech bank in Brazil Nubank announced that the clients of this bank will be able to purchase and sell such cryptocurrencies as Bitcoin (BTC) and Ether (ETH).
