Brazilian tax department requires data from international crypto exchanges: new regulatory era.
Brazil’s tax authorities are reportedly planning to obtain information from foreign cryptocurrency exchanges about how they operate in the country and whether or not its citizens comply with the country’s new tax laws.
The Federal do Brasil (Brazil’s Federal Revenue) is expected to call the companies for more information later this week and publish a regulation, as reported by Reuters.
“Our first concern is to understand how they operate here, whether there is any illegality or not,” Andrea Chaves, DFR’s undersecretary for oversight, told Reuters.
Last December, Brazil passed a law making it mandatory for Brazilians to pay a 15% income tax on cryptocurrency gains and dividends in foreign currency.
The Brazilian tax authority aims to collect about $4 billion (20 billion Brazilian reals) in the 2024 fiscal year.
Binance, Coinbase, OKX, and Ku Coin are among the notable trading platforms operating in the country. Binance currently holds the largest market share in Brazil, accounting for 79% of all transactions — although it has lost some blow in recent months to Brazil’s Mercado Bitcoin and Mexico-based bits/.
Meanwhile, cryptocurrency trading activity in Brazil has soared in the first few months of 2024, increasing 30% year-on-year to $6 billion between January and May.
A recent Caico report showed that Latin America is the largest market and the seventh-largest global market for fiat currencies.
Stable funds transfer is the main driver of cryptocurrency activity in Brazil.
Conclusion: The Brazilian Federal Revenue Service’s mandate for international crypto exchanges to report data on Brazilian users represents an important step in the regulation of the cryptocurrency market.