The Brazilian Internal Revenue Service requires citizens to report all cryptocurrency transactions, and unreported people will face fines

According to Cointelegraph, starting on August 1, Brazilian citizens are obliged to report their cryptocurrency transactions to the Internal Revenue Service (IRS).

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Brazilian entities must report all encrypted transactions

Transactions involving cryptocurrencies such as Bitcoin must be reported to the IRS in accordance with the rules established by the 1888 Code Directive issued in May 2019.

According to the Brazilian National Public News Agency, the new measures apply to individuals, companies and brokerage companies, involving a variety of encryption-related activities, including buying, selling, donating, exchanging, depositing and withdrawing funds.

The report states that the measure requires the entity to provide a monthly report by the end of the month following the cryptocurrency-related transaction. Therefore, the transaction information for August should be submitted at the latest on the last working day of September.

According to the regulations, the Brazilian cryptocurrency exchange must inform the IRS of all operations, regardless of the amount involved. For groups that use non-Brazil exchanges/brokers or cryptocurrencies through a peer-to-peer platform, if the monthly transaction amount exceeds R$30,000 ($7,800), they will have to report the transaction.

Fine: 1.5% – 3% of undeclared transaction amount

Those who do not report encrypted transactions will face a fine ranging from R$100 to R$500 or R$25 to $130. The Brazilian National Public Information Agency stated that the IRS is also authorized to charge 1.5% to 3% of the undeclared transaction amount as a fine.

The Brazilian Internal Revenue Service believes that the Brazilian digital currency market has more investors than Brazil's second-largest stock exchange B3. The latter is said to have about 800,000 customers. The report pointed out that the Brazilian authorities aimed to combat illegal activities such as money laundering, tax evasion and terrorist financing through this measure.

Recently, the president of the Industrial Association of São Paulo, Brazil, expressed concern that Brazilians began to use cryptocurrencies to achieve tax evasion.