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Invested in Bitcoin? Learn how to declare cryptocurrencies in Income Tax

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Brazil, 5G and digital currencies

The cycle of low interest rates, which brought down fixed income yields, has increased the demand for other investments. In addition to the stock exchange, which set a record for new investors last year, cryptocurrencies also became an option for many Brazilians. Despite not being considered by Brazilian law as movable assets or legal tender, those who invest in cryptoactives must declare them in the Income Tax. The declaration was already required in previous years, but for the 2021 Income Tax, the Internal Revenue Service created specific fields for the declaration of digital currencies, increasing the siege on the movement of digital currencies. The declaration must be made if the taxpayer had, on December 31 of last year, more than 5,000 reais in cryptocurrencies. For Julieti Brambila, legal director of startup Altler, cryptoactive account, it is important that investors declare what they have in digital currencies. “The tendency is for the Federal Revenue to be aware of all movements, so those who do not declare in the future may have problems and be subject to penalties and fines, due to the crossing of data that occurs under IN 1.888/19, which obliges agents of the crypto sector to provide information on the operations.” Bitcoin, the most famous of digital currencies, had a big bullish cycle last year, breaking record after record and establishing itself as one of the great global currencies, appreciating more than 400% since last year. To make the declaration, the taxpayer must have in hand a report of their movement of assets. For this, you need to ask companies (exchanges, wallets, etc.) for statements in the period from January 1st (or the purchase date) until December 31, 2020. This year, taxpayers must fill in the fields with the new codes and no longer inform in “Goods and Rights” and in the field “Other goods and rights” code 99, as was done last year. “This year, the codes for declaration changed: code 81 was for bitcoin (BTC), code 82 for other cryptocurrencies and code 89 for other digital assets that are not cryptocurrencies. Therefore, it is important to always pay attention to the codes entered, remembering that each purchase operation must be declared individually, with the necessary details”, reveals Julieti. It is worth remembering that all income tax returns are made in reais and the base price information must always be attributed to the cryptoactive acquisition value and not to the market value. “Cryptocurrencies are considered financial assets like any other, so their disposals (purchase, sale, exchange, etc.) must also be declared to the Internal Revenue Service and the operations must be proven”, says Rodrigo Soeiro, CEO of the Brazilian platform Monnos, social network of investments in cryptocurrencies. If there is a difference between the acquisition cost and the sale value, there is a gain that may or may not be taxable. For sales of cryptocurrencies, profit (capital gain) will be calculated when the values ​​of the operations, in the month, exceed 35 thousand reais, and the tax must be paid by the last day of the month following the operations. The computer program is now available on the Internal Revenue Service page. Mandatory Income tax declaration season runs until April 30th. The Revenue expects to receive 32 million declarations and as of Monday, 15.5 million had already delivered the document. The taxpayer who, in the calendar year 2020, received taxable income, subject to adjustment in the declaration, whose sum was greater than 28,559.70 reais (equivalent to 2,196.90 reais per month of salaries, pensions) is required to submit the annual declaration or rentals). Individuals who, in the calendar year 2020, have received exempt, non-taxable or taxed exclusively at source, the sum of which totaled more than 40,000 reais, must also submit the declaration. Taxpayers who operated on the Stock Exchange last year and came to live in Brazil until the end of the year must also declare. Obligations are the same as in last year. In addition to the specific field for cryptoactives, another new feature this year is emergency aid. If the taxpayer or their dependents received the benefit last year and have taxable income above 2,800 reais, they are required to deliver the document and will have to return the aid received. Continues after advertising

Dov is a Blockchain and Forex trading enthusiast, who spends most of his time trading and examining software who are related to cryptocurrencies and forex trading. You can follow on Dov’s reviews and articles here on TrustedBrokerz and across the web.