Are you from Brazil and wondering how crypto taxes work and if you need to pay taxes on your cryptocurrency transactions? Not exactly sure how to report your crypto transactions to the Federal Revenue of Brazil (FRB) – Receita Federal do Brasil? In this complete crypto tax guide for Brazil, you will learn everything you need to know about how cryptocurrencies are taxed, how much tax you must pay on your cryptocurrency profits, and how to report your crypto taxes to Receita Federal.
Just a heads up! This guide is quite extensive due to the complex nature of cryptocurrency taxes. While we recommend reading this guide from A to Z the first time to make sure you don’t miss out on anything important, you can also use the menu navigation on the right side to jump to any specific crypto tax question later.
We are also updating this guide regularly based on the latest tax guidelines and statements from the Federal Revenue of Brazil. All updates will be listed below so that you can quickly see if anything has been updated since your last visit:
Latest updates
- August 31, 2022: The first version published
Let’s start with the most important question of all…
Is cryptocurrency taxed in Brazil?
Yes – profits from selling cryptocurrencies are taxed if the total sales amount exceeds R$35,000 in any single month during the tax year. Profits are taxed as capital gains where the progressive tax rates vary between 15% and 22.5% depending on the capital gain amount.
How is crypto taxed in Brazil?
Being one of the largest cryptocurrency markets in the world, Brazil is currently paving the way for both crypto adoption and regulatory oversight among the countries in Latin America. With new regulations coming into effect in both 2019 and 2020, the Receita Federal has now provided the necessary legal framework for both businesses and individuals to buy, store, transact with and report cryptocurrencies according to Brazilian law.
Currently as it stands, cryptocurrencies are considered movable goods from a tax perspective. This means that profits arising from selling crypto assets for reais or other fiat currency are taxed as Capital Gains Tax.
However, profits from the sale of cryptocurrencies are only subject to taxation if the total transaction volume exceeds R$35,000 in the same month that the profit took place. The transaction volume considered includes both transactions where a crypto asset is exchanged for fiat currencies or other crypto assets. We will look at this in more detail later in this guide.
Receita Federal published a new declaration on May 24th, 2022, that also “like-kind exchanges” are subject to the same tax rules as the sale of crypto assets. The term like-kind exchanges includes all different types of transactions where one cryptocurrency is exchanged for another, such as trading cryptocurrencies on a centralized or decentralized exchange. This has, obviously, a major impact on how much tax Brazilian individuals need to pay on their crypto transactions. This new declaration by the Federal Revenue of Brazil has stirred a lot of controversy in Brazil and several politicians and people from the parliament has called the new law outright illegal and unconstitutional. As it stands today, it is not clear whether or not the new law is actually legal and should be followed by Brazilian individuals. In case of doubt, we recommend consulting with a local tax advisor in Brazil that are up to date about the latest regulations in the country.
Tax rates in Brazil
The two most important taxes to consider for Brazilian taxpayers are Income Tax and Capital Gains Tax. Let’s look at both in more detail.
Income Tax
Similar to most other countries, Brazilian residents are taxed on their worldwide income. This means that you have to pay income tax according to the same local tax rates for income from being employed by a Brazilian company or from an overseas non-Brazilian company.
The tax rates are progressive and vary between 7.5% and 27.5% depending on the taxable income amount. In other words, the more you earn, the more you pay in taxes. There are no other local or provincial income taxes that you have to pay on top of these rates.
The income tax rates for monthly income for 2022 are as follows:
| Monthly taxable income (BRL) | Tax rate | Deductible tax amount (BRL) |
|---|---|---|
| 0 – 1,903.98 | Exempt | 0 |
| 1,903.99 – 2,826.65 | 7.5% | 142.80 |
| 2,826.66 – 3,751.05 | 15.0% | 354.80 |
| 3,751.06 – 4,664.68 | 22.5% | 636.13 |
| 4,664.69+ | 27.5% | 869.36 |
Capital Gains Tax
Typically, if you sell an asset subject to capital gains tax for a higher price than you originally paid to acquire the asset, you will need to pay Capital Gains Tax on the profits. The general rule is that Capital Gains Tax is applicable for the following assets:
- Real estate
- Vehicles, art, and collectibles sold in Brazil or abroad
- Stocks sold in foreign markets
- Interest income from investments located offshore
The Capital Gains Tax rates vary between 15% to 22.5% based on the total capital gain amount.
| Capital gain (BRL) | Tax rate |
|---|---|
| 0 – 5,000,000 | 15.0% |
| 5,000,001 – 30,000,000 | 17.5% |
| 30,000,001+ | 22.5% |
However, the tax rates mentioned above do not apply to stocks sold in Brazilian markets or in over-the-counter (OTC) markets, which are instead subject to equity income taxation. Equity income is currently taxed at a flat rate of 15% in Brazil.
How to calculate capital gains in Brazil
The current tax rules surrounding cryptocurrencies in Brazil are not always straight-forward to interpret, so for the sake of this article we assume that only transactions where a crypto asset is sold for reais or another fiat currency are subject to taxation.
To find the resulting capital gain of a sales transaction, you need to first determine both the sales price (proceeds) and the purchase price (cost basis) of the cryptocurrency sold. The selling price is simply the value of the cryptocurrency sold at the time of the transaction in reais. The purchase price should be determined using either the First-in First-Out (FIFO) or the Average Cost Basis (ACB) accounting method. The FIFO method implies that the earliest acquired coins are sold first if you have acquired a cryptocurrency on more than one occasion before selling the same cryptocurrency later. The ACB method, however, lumps all purchases of the same asset into the same pool so that the purchase price is calculated as an average from the total cost. The default cost basis method used when creating your Coinpanda account is the FIFO method.
You should also add any directly related trading fees to the purchase price so that the fees are deducted from the resulting gains. A crypto tax calculator such as Coinpanda will include the fees in the calculations automatically so that you are not paying more tax than you should!
Let’s look at an example to better understand how to calculate capital gains from transactions with cryptocurrencies.
Example 1
João bought 0.2 BTC for R$40,000 in December of 2021. Two months later, in February of 2022, he buys 0.3 BTC for R$55,000. João owns now 0.5 BTC which he has paid a total of R$95,000 for.
In March of 2022, João decides to sell 0.4 BTC while keeping 0.1 BTC as a long-term investment. He sells 0.4 BTC and receives R$110,000 in exchange. His transactions can be seen in the table below:
| Type | Date | Amount | Price | Cost Basis | Profit/Loss |
|---|---|---|---|---|---|
| Buy | 2021-12-10 | 0.2 BTC | R$40,000 | R$40,000 | |
| Buy | 2022-02-08 | 0.3 BTC | R$55,000 | R$55,000 | |
| Sell | 2022-03-15 | 0.4 BTC | R$110,000 | (?) | (?) |
The first thing João needs to do is to calculate the acquisition price of the 0.4 BTC sold using the FIFO method: R$40,000 + 0.2 / 0.3 * R$55,000 = R$76,667.
Since we know the sales price was R$110,000, we can find the resulting capital gains directly: R$110,000 – R$76,667 = R$33,333.
The resulting table will look like this:
| Type | Date | Amount | Price | Cost Basis | Profit/Loss |
|---|---|---|---|---|---|
| Buy | 2021-12-10 | 0.2 BTC | R$40,000 | R$40,000 | |
| Buy | 2022-02-08 | 0.3 BTC | R$55,000 | R$55,000 | |
| Sell | 2022-03-15 | 0.4 BTC | R$110,000 | R$76,667 | R$33,333 |
Since the sales amount exceeds R$35,000, João needs to file the monthly declaration for March before the end of April 29, 2022. He will then need to pay 15% tax which equals R$33,333 * 15% = R$5,000. The taxes are paid by issuing a DARF to Receita Federal.
Which statements to declare
There are three different statements cryptocurrency investors and traders in Brazil need to consider. Which of these statements you need to declare depends on your unique situation and the different transactions you have made with cryptocurrencies during the tax year.
Annual Income Tax Return (IRPF)
The personal income tax return is where you report your taxes for ordinary income and employment and is due on the last business day of April of the year following the year which you report taxes for.
With regards to crypto assets, any cryptocurrency with an acquisition cost above R$5,000 needs to be declared as an asset in the tax return. This calculation should be done on the last day of the tax year – December 31st each year.
However, if you do not own any cryptocurrencies that have an acquisition cost above R$5,000, you do not need to declare cryptocurrencies in the IRPF tax return. If you forgot to declare any cryptocurrencies that had an acquisition cost above R$5,000 for the previous years, you have the possibility to rectify those tax returns.
How to file the income tax return (IRPF)
The following steps for filing the annual income tax return are based on our best knowledge at the time of writing this article. It is possible that the procedure is changed in the future or that other requirements are introduced later.
- Step 1: Download the Receita Federal IRPF application for the year you are reporting taxes for
- Step 2: Download the IRPF Balance report from your Coinpanda account (NB! coming later in 2022)
- Step 3: Open the IRPF application and select the “Bens e Direitos” tab
- Step 4: Click on the “Novo” button to add a new transaction record
- Step 5: Fill in the data for each cryptocurrency according to the information in the IRPF report generated by Coinpanda
- Step 6: Click on the “Voltar” button and review the list of transactions in your declaration
If you need to also report capital gains, remember to import your GCAP statement before submitting the IRPF!
I need help with my crypto taxes!
If you struggle with reporting your cryptocurrency taxes in Brazil, you can use Coinpanda to help you generate all the required documents you need to declare your taxes. After importing all transactions with API keys or by uploading CSV files, simply generate a tax report which shows the total acquisition cost on December 31st for each cryptocurrency.
It is 100% free to create an account and see if the software works for you.
Annual Capital Gains Statement (GCAP)
Whether or not you have to file an annual capital gain statement (GCAP) depends on the value of all disposals you have made and if any of the sales resulted in a profit.
- If you made a profit from at least one transaction and the amount sold exceeds R$35,000 in the month, you need to declare and pay tax on the profits
- If you made a profit from at least one transaction, but the amount sold did not exceed R$35,000 in the month, you need to declare the income but you are exempt from tax
If you didn’t make a profit, independent of the total value of your transactions in the same month, you don’t need to declare the capital gain statement or pay any taxes.
The deadline for submitting the annual capital gains statement (GCAP) is the same as for the personal income tax return. However, the deadline for paying taxes on your capital gains is the last business day of the month following the month in which the transactions were carried out. This means that even though you have to declare your capital gains only once a year, you still have to pay taxes each month if you made a profit and if the total value of your disposals exceeds R$35,000. The taxes are paid by issuing a DARF – Documento de Arrecadação de Receitas Federais, or Federal Revenue Collection Document in English terms.
How to file the GCAP statement
The following steps for filing the capital gains statement are based on our best knowledge at the time of writing this article. It is possible that the procedure is changed in the future or that other requirements are introduced later.
- Step 1: Download the Receita Federal GCAP application for the year you are reporting taxes for
- Step 2: Download the GCAP report from your Coinpanda account (NB! coming later in 2022)
- Step 3: Open the GCAP application and select the “Direitos/Bens Móveis” tab
- Step 4: Click on the “Novo” button to add a new transaction record
- Step 5: Fill in the data of each tab of the declaration according to the information in the GCAP report generated by Coinpanda
- Step 6: Click on the “Voltar” button and review the list of transactions in your declaration. You must include all sales transactions throughout the year in which you made a profit, either to justify exempt profits or to justify the payment of tax.
- Step 7: If there is tax due, go back to the GCAP application after making the payment and open the transaction in which you made a profit by double-clicking on it to indicate that you have paid the tax.
- Step 8: Click on the “Export to IRPF” button to be able to attach the GCAP declaration to your income tax return.
Please be aware of the following:
- Regarding the field “Onde o bem foi adquirido?”, there are discussions about what should be specified given that a cryptocurrency is a digital asset that does not originate from a physical place. However, you can most likely enter “Brazil” in this field until Receita Federal makes an official statement in the future.
- By default, you should specify the other party of the transaction whenever possible. However, since this is not possible with cryptocurrencies, declaring “Comprador na Exchange XXX” is what is typically done.
Monthly statement of cryptocurrency operations (IN 1.888)
The requirement from Receita Federal to declare monthly statements about cryptocurrency transactions has created a lot of headaches and confusion for Brazilian taxpayers since its introduction. Let’s look at this in more detail and how to decide if you need to declare the monthly statement or not.
The requirement for declaring IN 1.888 is that the total value of all cryptocurrency transactions done outside Brazilian exchanges exceeds R$30,000 during the month. It’s important to understand that you should not include transactions done on Brazilian exchanges such as Mercado Bitcoin.
If the total value of your transactions in the same month exceeds this limit, you need to declare the monthly statement before 11.59 pm on the last working day of the month following the month in which the transactions were carried out. For example, for the month of August 2022, you need to declare the monthly statement before the end of September 30, 2022.
How to file the monthly statement IN 1.888
The following steps for filing the monthly statements are based on our best knowledge at the time of writing this article. It is possible that the procedure is changed in the future or that other requirements are introduced later.
- Step 1: Download the monthly report from your Coinpanda account for the month that you want to declare (NB! coming later in 2022)
- Step 2: Log in to the eCac online portal
- Step 3: Click on the menu “Cobrança e Fiscalização“
- Step 4: Select the option “Obrigação Acessória – Formulários online e Arquivo de Dados“
- Step 5: Click on the “Enviar” icon on the line “Declaração sobre Operações Realizadas com Criptoativos – ARQUIVO DE DADOS“
- Step 6: Download Receitanet and install the application, then open the application
- Step 7: Select the delivery type, month, and year of the declaration. If you are making the declaration for a particular month for the first time, select the delivery type “Original”.
- Step 8: Click the “Adicionar Arquivos” button and select the file downloaded from your Coinpanda account previously
- Step 9: Select the declaration layout type according to the downloaded data file name
- Step 10: Validate the format of the uploaded file and check if there are any issues
- Step 11: Click on the “Transmitir” button and sign with your digital certificate. You will receive a receipt for the transmitted PDF file.
Does Receita Federal know about my crypto?
After the new law that came into effect in September of 2019, the Federal Revenue of Brazil, Receita Federal, has now access to the transaction history of Brazilian individuals from local cryptocurrency exchanges in Brazil. This law was proposed to combat money laundering and tax evasion by giving the federal tax authority more insight into Brazilian taxpayers’ crypto assets and their related transactions.
This law includes only local exchanges in Brazil, but it’s likely that also foreign exchanges are cooperating with Receita Federal and providing the tax agency information about their Brazilian customers. For these reasons, it is very likely that Receita Federal knows about your cryptocurrency holdings and you should therefore report your taxes correctly to avoid potential fines or penalties in the future.
Is buying cryptocurrency taxed in Brazil?
Buying cryptocurrency with reais or other fiat currency is not taxed in Brazil. This is because no cryptocurrency is either sold or disposed of which constitutes the sale of a crypto asset.
Buying cryptocurrency with fiat currency
Simply buying cryptocurrency with fiat currency is not taxed according to the current tax rules. Keep in mind that you should keep track of your purchases because you need this information to calculate the profits or losses when you sell the coins at a later time.
Buying crypto and paying with another crypto
Acquiring one crypto asset in exchange for another crypto asset is considered a like-kind exchange. Until May of 2022, like-kind exchanges were not viewed as a sale from a tax perspective and were therefore exempt from taxation, but the new declaration from Receita Federal states that also like-kind exchanges should now be considered equal to sales.
It is currently not clear if the new law is legal or not, so we recommend consulting a tax advisor in Brazil to understand how such transactions should be reported.
Is selling cryptocurrency taxed in Brazil?
Yes – selling cryptocurrency in exchange for reais or other fiat currency is considered a taxable event and you have to calculate the realized gains on the crypto asset sold. You have to pay capital gains tax on the profits if the total value of your disposals exceeds R$35,000 in the same month.
Selling cryptocurrency for fiat currency
Selling or exchanging cryptocurrency for fiat currency such as the reais or US dollar is considered a taxable disposal by Receita Federal and you need to calculate the gains on the currency sold. Profits are then taxed between 15% and 22.5% – but only if the total sales amount exceeds R$35,000 in the same month as the disposal that resulted in the profit took place.
Selling crypto for another crypto
Selling crypto for another crypto is similar to buying crypto for another crypto and it’s currently not clear if such like-kind exchanges are subject to taxation in Brazil.
Taxes on cryptocurrency mining
To the best of our knowledge, no official statement has been issued by Receita Federal with regard to how cryptocurrency mining should be taxed. It is therefore not clear if mining rewards are taxed as personal income or as capital gains at the time of receipt, or if the rewards are first taxed when sold at a later time.
However, from conversations we have had with local tax advisors in Brazil, it is likely that mining rewards are treated as an original acquisition and are therefore not taxed before the time of being sold rather than when the coins arrive in the individual’s wallet. Assuming this is the case, mining rewards are therefore only taxed at the time of sale if the total sales amount exceeds R$35,000 in the same month the rewards were sold.
If you have been mining bitcoin, ethereum, or other cryptocurrencies, we highly recommend talking with a local accountant or tax advisor in Brazil that can help you report your taxes correctly according to the law.
Taxes on crypto staking rewards
Similar to mining rewards, no specific mention of how cryptocurrency staking rewards are taxed can be found in the Brazilian tax law or statements from Receita Federal. The general assumption is therefore that staking rewards are considered equal to mining rewards from a tax perspective, and are therefore not taxed at the time of receipt.
How are airdrops taxed in Brazil?
Similar to mining and staking rewards, no specific tax guidance exists yet that clarifies how cryptocurrency airdrops are taxed.
We will update this guide with more information later if Receita Federal publishes updated guidance that includes also the tax treatment of airdrops.
Receiving salary in a cryptocurrency
Being paid in cryptocurrency, either as a salary from employment or in exchange for services as a freelancer, is taxed similarly to being paid in reais or another fiat currency. This means that from a tax perspective, there is no practical difference in what type of currency you receive your compensation – the income amount will be taxed as income in all cases.
To calculate the income amount in reais at the time of receipt, you can use cryptocurrency prices from any reputable exchange – or let Coinpanda handle all the calculations automatically for you!
How to calculate crypto taxes in Brazil
If you are a Brazilian taxpayer and have transacted with cryptocurrency during 2022, you need to calculate the realized gains and income from all transactions. There are essentially two different ways to go about this – either manually or using a crypto tax calculator.
Let’s look at both methods:
Calculating your crypto taxes manually
Here are the steps you must take to calculate your crypto taxes manually:
- Download the transaction history from all exchanges where you have bought, sold, received, or sent any cryptocurrency. This includes also transactions from or to your own wallets.
- Calculate the cost basis for every individual transaction where cryptocurrency is disposed of
- Calculate the proceeds and resulting capital gains for all transactions that are considered taxable disposals by Receita Federal
- Identify all transactions subject to income tax by Receita Federal
- Summarize the calculations to find the total taxable amount during the financial year
Calculating your crypto taxes using crypto tax software
The best option for most people in Brazil is likely going to be using cryptocurrency tax software to automatically do the required calculations. If you want to save both time and money, here is how you can use Coinpanda to sort out your crypto tax situation and generate all the required tax reports automatically:
1. Sign up for a 100% free account
It is 100% free to create a Coinpanda account and you don’t need to enter any credit card information to get started. The free plan lets you explore and use all features for free.
Sign up with Coinpanda for free now!
2. Connect all your exchange accounts and wallets
Coinpanda supports more than 500+ exchanges, wallets, and blockchains today. You can easily import all your transactions by connecting your exchange accounts with API keys or by uploading a CSV file with the transaction history. If you find that Coinpanda does not support an exchange you have used, reach out to us so we can add the integration – usually within a few days.
3. Wait for Coinpanda to crunch all the numbers
Get yourself a cup of your favorite beverage and wait for Coinpanda’s sophisticated calculation engine to crunch all the numbers for you. Coinpanda will automatically calculate the cost basis, proceeds, capital gains, and taxable income for all your transactions! This might take anywhere from 20 seconds to 5 minutes depending on how many transactions you have.
4. Check for any reported warnings
Coinpanda will automatically display a warning if it appears that one or more transactions are missing such that the cost basis calculations will not include the total purchase price. If you see any warnings, you should first double-check that you have in fact connected all your wallets and exchange accounts.
Do you still see any warnings? Fear not! We have written an extensive list of help articles that will guide you through the entire process of making sure your crypto tax reports are as accurate as possible. If you still need any help, the best way to get in touch with our customer support and tax experts is through the Live Chat.
5. Download your tax reports and tax forms
When you have successfully imported all transactions, the final step is to download the tax reports you need to file your taxes in Brazil. Coinpanda’s tax plans start at $49 and you have lifetime access to all reports after upgrading.
Crypto tax deadline in Brazil
The tax year in Brazil runs from January 1 to December 31 each year. The annual capital gains statement should be reported together with your personal income tax return where you also report ordinary income from employment.
The general deadline for the personal income tax return is the last business day of April of the year following the year which you report taxes for. That means that the deadline for reporting your 2022 taxes is April 28, 2023.
In addition to the annual tax return, you may have to also file a monthly declaration if the total value of all cryptocurrency transactions done outside Brazilian exchanges exceeds R$30,000 during the month as discussed previously in this guide. The deadline for the monthly declarations is the last working day of the month following the month in which the transactions were carried out. For example, for the month of September 2022, you need to declare the monthly statement before the end of October 31, 2022.
How to report crypto taxes in Brazil
After calculating your capital gains and income for all transactions during the tax year, the last step is to report your crypto taxes in your personal tax return before the deadline on the last working day of April the following year. The annual declarations, both IRPF and GCAP, must be filed using the individual applications from Receita Federal, while the monthly declarations (IN 1.888) should be filed using the eCac online platform.
We have explained in detail how to file the different declarations previously in this guide:
- Annual Income Tax Return (IRPF)
- Annual Capital Gains Statement (GCAP)
- Monthly statement of cryptocurrency operations (IN 1.888)
Which records may Receita Federal ask for?
There is currently no official list of records or bookkeeping details that Receita Federal may ask you to provide for cryptocurrency transactions in case of a tax audit. However, as a general rule, you should keep records of the following details for each transaction as a minimum:
- The date of the transaction
- The cryptocurrencies involved in the transaction
- Type of transaction
- How much was bought, sold, or exchanged
- The value of the cryptocurrency in BRL at the time of the transaction
- Exchange records and other relevant statements
You should periodically take backup of these records from all exchanges you have traded on since many exchanges keep these records for a limited time only – or the exchange itself may cease to exist in the future. You can also use a cryptocurrency tax app like Coinpanda to generate a report with all this information automatically.
