Every year we receive the same question: "do I need to declare my crypto?" And to clarify this and the main doubts of our customers, we have gathered the main doubts in this article. In addition to recording an interview with the lawyer Thiago Barbosa, from Ogawa, Lazerotti & Baraldi Advogados to clear the basic doubts on how to declare your income tax crypts according to the law. Come with us! 😉
1) Who should declare cryptography?
Strictly speaking, everything that makes up your assets must be declared in the Income Tax: your house, your car, your applications ... and so it is with crypto assets. Last year, the IRS issued a normative instruction, number 1,888, which requires the declaration of all crypto operations to the IRS. An example: there are people who exchange cryptocurrency for cash and that money needs to be declared. In addition, due to the 1888 instruction, we at the Bitcoin Market also inform the Revenue of all transactions made here. If you fail to declare, the IRS will detect this divergence and you will be subject to a fine.
2) How do I declare my crypto?
There are two steps: in the first, in the "Goods and Rights" tab of the declaration form, select code 99, from "Other Goods and Rights". The amount to be declared is what you paid to purchase the crypto. Declare each of your cryptographs separately. Then, in the field “Discrimination, inform the number of crypto assets, their type (bitcoin, precatory token, etc.), and quote on the date of purchase. Crypto assets are subject to Exclusive or Definitive Taxation. For this reason, in addition to the "Goods and Rights" tab, the income from crypto assets, even if there was no withdrawal, must be included in the "Income from Applications Subject to Exclusive / Definitive Taxation" section.
3) What values should I declare?
Simple: access your account at the Bitcoin Market and pull an extract from each of your cryptographs from January 1 (or the date of purchase) until December 31, 2019
4) Are income taxed?
Transactions the amount of which exceeds R $ 35 thousand are on the radar of the Federal Revenue and are now taxed. The capital gain need not necessarily be 35 thousand. For example: if I buy 1 bitcoin for R $ 36 thousand and sell this bitcoin for R $ 40 thousand, my capital gain corresponds only to R $ 4 thousand, these R $ 4 thousand will be subject to taxation.
Gains above R $ 35 thousand are taxed as follows:
15% on earnings of up to R $ 5 million ;
17.5% on earnings over R $ 5 million up to R $ 10 million ;
20% on gains between R $ 10 million and R $ 30 million ;
22.5% on earnings greater than R $ 30 million .
5) What happens if I fail to declare the crypto?
As we have already said, the Bitcoin Market strictly follows the determinations of Instruction 1888. In other words, we inform the Revenue of all operations carried out here. If you fail to declare, you will surely fall into Malha Fina and be subject to a fine. Boring, right? So, correctly declare your crypto.