Brazil’s Department of Federal Revenue, the country’s tax regulator, now instructs local crypto exchanges to provide a monthly report about their operations in a bid to verify tax compliance and improve the country’s campaign against money laundering and corruption.
Brazilian authorities have announced that they will start mandating local crypto exchanges to submit monthly reports just like the case in Australia and South Korea.
There has been a notable growth in digital currency trading in Brazil. This is clearly demonstrated in 2017 when the number of users on crypto operators exceeded the number of registered users on the Sao Paulo stock exchange.
In 2014, the annual Bitcoin trading volume has increased from 44.8 million BRL or equivalent to $12.12 million in today’s rate to 113 million BRL or roughly $30.57 million in 2015. In 2016, volume grew even higher with 363.2 million or $98 million (based on current rates) and 8.3 billion BRL or about $2.25 billion in 2017.
Notably, Brazil’s currency has seen a significant drop by around half during the said period as the value of Bitcoin reached an all-time high in late December of 2017.
Based on the daily trading volume posted on July 10 by the country’s largest crypto exchanges, there is indeed a “substantial” digital currency market in the country. At the time, Mercado Bitcoin’s daily volume was at 3.1 million BRL or roughly $840 million, Foxbit has 1.2 million BRL, while Bitcoin trade posted 2.2 million BRL or about $600,000. On the other hand, BasiliEX and Bitcointoyou registered daily trading volumes of 790,000 and 974,000 BRL (or $213,000 and $263,000) respectively.
The announcement also states that currency trading operations will be subject to capital gains tax, at progressive rates according to the amount realized which is 15 percent on an amount not more than 5 million BRL and up to 22.5 percent on the amount not less than 30 million BRL. Right after Jair Bolonaro has been elected president money laundering and corruption became the country’s main concern.
As previously reported by CoinWire, exchanges in Australia are required to report users’ identity for anti-money laundering purposes and to help combat funding for terrorism. Meanwhile, tax authorities in South Korea have collected approximately 24 percent of crypto exchanges’ revenue in tax. The tax regulators also demand segregated accounts and KYC procedures.