The Internal Revenue Service in Brazil has mandated that cryptocurrency users in the state report their cryptocurrency activities and transactions to it (IRS), which reportedly is in accordance to the rules established by Normative Instruction 1,888 created in May 2019.
According to the report, starting from today, August 1, citizens, companies, brokerages, cryptocurrency activities which include: buying and selling, donations, barters and so on, executed in Brazil are required to report their cryptocurrency dealings with Brazil’s IRS.
The report also noted that report will be forwarded to the IRS by the end of the month following the month cryptocurrency transactions and activities were carried out. This means that the information on cryptocurrency transactions in the month of August will be reported to the IRS by the end of September.
As such, local exchanges will be required to report to the IRS, every cryptocurrency dealings and transactions executed on the exchange regardless of the value, while users of foreign exchanges will be mandated to report cryptocurrency transactions in cases where the monthly amount exceeds 30,000 Brazilian reais ($7,800), the reported noted.
For those who fail to adhere to the IRS’s instruction to report their monthly cryptocurrency transactions, the report noted that they will stand to face penalties ranging from 1.5% to 3% charged from the value of the unreported transaction.
The decision by the IRS is in a bid to combat illicit activities of money laundering, tax evasion and terrorist financing perpetrated using cryptocurrencies among citizens in Brazil.