economy and politics

Brazil tax authority to summon foreign cryptocurrency exchanges for information

Brazil tax authority to summon foreign cryptocurrency exchanges for information

Brazil’s federal tax authority will call foreign cryptocurrency exchanges that are not based in the country to explain their operations and how they collaborate with local service providers, government officials told Reuters.

The Receita Federal, the tax and customs control service, is expected to publish an ordinance this week requesting more information from these companies. Unlike those formally established in Brazil, those incorporated abroad are not required to report transactions carried out on their platforms.

“For us it is an area of ​​concern to first understand how they operate here, whether there is illegality or not. We are also concerned about having information about Brazilian wealth subject to tax here,” said Andrea Chaves, the agency’s Undersecretary of Inspection, on Monday.

Wagner Lima, risk management coordinator for the service, said the government also aims to understand how these exchanges cooperate with service providers in the country to ensure they provide the information required by the tax revenue office under a 2019 regulation.

Exchanges that are not based in Brazil but operate in the country and even have websites in Portuguese include Binance, Coinbase, OKX and KuCoin.

The call comes amid a rise in crypto assets in Latin America’s largest economy.

From January to July 2023, Brazilians declared 133.6 billion reais ($24.6 billion) in crypto assets, an increase of 36.6% compared to the same period last year, according to the latest data from the tax service, which is working in a technology update to publish new figures.

Of this total, 14.5 billion reais were declared using exchanges abroad, a growth of 51.2% on the same basis. In this case, providing information to the government depends on the taxpayers, whether they are individuals or legal entities.

(1 dollar = 5.4245 reais)

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