When should the declaration be made?
According to the latest Federal Revenue report, the deadline for filing the Individual Income Tax Declaration was postponed to June 30, 2020 .
For those who exceeded R $ 35,000 in sales in a given month , and made a profit, the payment due by means of the carnage-lion is the last business day of the month following the event. For gains of up to R $ 5 million, the rate is 15%.
In the case of taxpayers who have already submitted the declaration, the IRS informs that the version of the Program generating the Declaration (PGD) will be updated, and thus it will be possible to issue a new DARF.
How are those who have not used exchanges?
According to Normative Instruction 1.888 of the Revenue, Individuals and Legal entities that operate in foreign exchanges, or that have transacted a sum above R $ 30,000 in a given month must provide information .
For the purpose of informing the Revenue, in addition to buying and selling, exchanges between different cryptocurrencies, transfers and withdrawals from exchanges, rent and donations are accounted for. This other article explains in detail how to declare your transactions in crypto .
The set of information must be sent electronically through the National Collection system, made available through the Virtual Service Center (e-CAC). The term is the last business day of the month following operations.
In short, it is not exempt from those who negotiated only abroad, or only between individuals in the P2P mode. In this case, the user is responsible for rendering accounts, subject to fines ranging from 1.5% to 3.0% of unreported operations.
Where to declare?
The IRS must be informed once a year, through the IRPF program (Individual Income Tax) , the same used to declare other income and assets, including changes in assets.
First, look for the “Goods and Rights” tab of the annual income tax return form. Crypto assets come under code 99, “Other Assets and Rights”. The amount to be declared is what you paid at the time of purchase .
Declare each of your cryptographs separately. In the "Discrimination" field, enter the number of crypto assets, their type (bitcoin, precatory token, etc.), and quote on the date of purchase.
Gains referring to months for which the sum of sales has not exceeded R $ 35,000 are exempt from taxation, therefore they must be declared in the section “Exempt and Non-Taxable Income”. The total profit for the year must be entered using the code “05 - Capital gain on the sale of assets”.
Profits in months whose total crypto sales exceed R $ 35,000 are subject to Exclusive or Definitive Taxation. For this reason, in addition to the "Goods and Rights" tab , any gains must be included in the "Income from Investments Subject to Exclusive / Definitive Taxation" section .
Regardless of the still undefined regulatory issue, it is necessary to declare capital gains in cryptocurrencies to the Federal Revenue in the Income Tax . In 2020, the deadline for filing the IRPF Declaration was extended until June 30.
It is worth remembering, but the Income Tax declared in 2020 refers to the calendar year 2019, being necessary to pay taxes on capital gains in Bitcoin and cryptocurrencies in the months when the total sales exceed R $ 35 thousand . This tax is collected through the carnage-lion, always in the month following the operation.
Although they are not legally recognized as currencies, they are considered as “Goods and Rights” for the Brazilian Federal Revenue , as well as a property, automobile or financial application. Thus, you are required to declare who owned, on Dec 31, 2019, more than R $ 5,000 in cryptocurrencies , calculated at the
acquisition price.
Why should I declare?
For a start, P2P corporate exchanges and intermediaries are now required to inform the IRS of all their customers' transactions. This was determined through Normative Instruction No. 1,888 , which came into force in September 2019.
In the case of Income Tax, in addition to the R $ 100 per month of delay, if information is omitted or inaccurate, a fine of 1.5% will be charged on the amount for Individual taxpayer. This fine rises to 3.0% for Legal Entities.
For sales of Bitcoins and cryptocurrencies that have exceeded R $ 35,000 in a given month, the capital gain tax must be paid in the month following the event. Delays are subject to an isolated fine of 20% of the amount due.
Don't run away from the lion! If you fail to declare, the IRS will detect any differences. In addition to fines and the risk of falling into the Fine Mesh, communication to the Federal Public Ministry may be formalized, when there are indications of the occurrence of crimes of tax evasion and evasion.
Basic rules
Keep in mind that there is only income tax if the taxpayer has made a profit on the transactions. The mere appreciation of a crypto is not a taxable event.
The balances that must be declared refer to the numbers of 23: 59: 59h of the day 31 / Dec / 2019. Values in stablecoins and R $ deposited in exchange accounts must also be included.
Individuals who received taxable income in 2019 in excess of R $ 28,559.70 are required to submit an income tax return. This criterion also includes exempt, non-taxable or exclusively taxed income at source, the sum of which exceeds R $ 40,000.
According to Thiago Barbosa, lawyer at Ogawa, Lazzerotti & Baraldi Advogados, "if you bought crypto in 2019, or any year before that, you are required to declare ... in your income tax return".
So far, it is not possible to offset losses with crypto assets in earnings from other operations .
How to declare capital gain?
If in any month of the calendar year 2019 the sum of your crypto sales exceeded R $ 35,000, you should compare it with the acquisition cost to calculate the profit. We must emphasize that the IRS considers the exchange for another crypto to be a sale , since it is disposing of the investment.
Even if you have operated only on exchanges, or exclusively in the Bitcoin Market, it is the investor's responsibility to calculate, declare earnings, and pay the Income Tax on his crypto transactions.
The calculation must be made through the Capital Gains Calculation Program (GCAP), which can be found on this link on the IRS website. Payment is made through the Federal Revenue Collection Document (DARF), using code 4600.
Tips to make your life easier
Issue annual statements of any exchanges you have traded on, including abroad;
Keep a record of all trades, whether they are in Excel, Word or equivalent;
Save the print-screen (screen copies) of transactions carried out outside exchanges;
Make sure that in your trades register you will find all the addresses on the blockchain for the entry and exit of crypto assets;
If you performed the monthly calculation of the Capital Gains Calculation Program (GCAP), save the files to import when you perform the IRPF 2020.
