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Cryptocurrencies have yet to be regulated in Brazil. Financial authorities have issued statements regarding the risks posed by this type of currency and its lack of guarantee by the monetary authorities, and they have advised that companies that trade in virtual currencies are not regulated, supervised, or licensed to operate by the central bank.  

According to the instructions of the Brazilian Secretariat of Federal Revenue, virtual currencies must be declared to the Secretariat and taxes must be paid if gains obtained from the sale of virtual currencies in one month exceed a certain amount. Recently, a Normative Instruction issued by the Secretariat made it mandatory to provide information related to operations carried out with cryptoassets to the Secretariat.

So far, Brazil’s tax authority has not provided any detailed instructions on the taxation of rewards tokens or tokens acquired by mining or staking or regarding the tax treatment of tokens received through airdrops and hard forks.

I. Introduction

A. Brazilian Central Bank Policy Statement No. 25,306 of February 19, 2014

On February 19, 2014, the Brazilian Central Bank (Banco Central do Brasil, BACEN) issued Policy Statement No. 25,306 on the risks related to the acquisition of so-called “virtual currencies” or “encrypted currencies” and transactions carried out with these currencies.[1] The purpose of the statement was, inter alia, to clarify that virtual currencies should not be confused with electronic money (moeda eletrônica) as defined in Law No. 12,865 of October 9, 2013, and its regulations.[2]

“Electronic money” is defined in article 6(VI) of Law No. 12,865 as a resource stored in a device or electronic system that allows the final user to make payment transactions in the national currency (Brazilian Real).[3] The statement explained that, in contrast, virtual currencies are denominated in a different unit of account from the currencies issued by sovereign governments and are not stored in a device or electronic system in national currency.[4] 

According to the statement,

  • the usage of virtual currencies and whether regulations applicable to financial and payments systems apply to them have been the theme of international debate and public announcements by monetary authorities and other public institutions, with few concrete conclusions thus far;
  • virtual currencies are not issued or guaranteed by a monetary authority;
  • these virtual assets are not regulated or supervised by the monetary authorities of any country;
  • there is no government mechanism that guarantees the value in official currency of those instruments known as virtual currencies; and
  • BACEN is monitoring the evolution of the usage of these instruments, as well as the related discussions in international forums—especially regarding their nature, ownership, and functioning—in order to possibly adopt measures within its sphere of legal competency, if necessary.[5]

B. Brazilian Central Bank Communiqué 31,379 of November 16, 2017

On November 16, 2017, BACEN issued Communiqué 31,379 reaffirming that virtual currencies are neither issued nor guaranteed by any monetary authority.[6] The document further states that although virtual currencies have been the subject of international debate and statements from both monetary and other public authorities, international organizations have found no need so far to regulate those assets. In Brazil, for the time being, no relevant risks to the National Financial System have been observed. Nevertheless, the Central Bank of Brazil remains alert to the use of virtual currencies and continues to follow international discussions on this matter in order to adopt the required measures, if necessary, while observing other bodies’ and entities’ mandates.[7]

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II. Taxation

A. Personal Income Tax

A booklet prepared by the Brazilian Secretariat of Federal Revenue (Secretaria Especial da Receita Federal do Brasil, RFB),[8] containing questions and answers regarding personal income tax for 2019, includes information on how to declare virtual currencies on a person’s income tax return and the appropriate taxation.[9]

The document states that virtual currencies must be declared. It explains that virtual currencies (bitcoins, for example), although not considered as currency under the current regulatory framework, should be declared in the Assets and Rights Tab as “other assets,” since they can be treated as a financial asset. The acquisition value of the assets must be stated. This type of “currency” does not have an official conversion rate, because there is no organ responsible for controlling its issue, so there is no legal rule for the conversion of amounts for tax purposes. However, the taxpayer must keep documentation proving the authenticity of these values.[10]

A question in the booklet asks whether gains obtained from the sale of virtual currency are taxed. The answer provided indicates that where the gains obtained from the sale of virtual currencies (bitcoins, for example) in one month is more than BRL35,000.00 (about US$6,573.63), these are taxed as capital gains, with progressive rates applying, and income tax must be paid before the last business day of the month following the month of the transaction. The taxpayer must keep documentation proving the authenticity of the transactions.[11]

B. Cryptoassets

Normative Instruction No. 1888 issued by the RFB on May 3, 2019, creates the obligation to provide information related to operations carried out with cryptoassets to the RFB and establishes penalties for noncompliance.[12] For the purposes of Normative Instruction No. 1888, the following definitions are provided:

I - cryptoasset: the digital representation of value denominated in its own unit of account, the price of which can be expressed in local or foreign sovereign currency, negotiated electronically with the use of cryptography and distributed registration technologies, which can be used as a means of investment, instrument of transfer of values ​​or access to services, and which does not constitute legal tender currency; and

II - cryptoasset exchange: the company (pessoa jurídica), even if not financial, that offers services related to transactions carried out with cryptoassets, including intermediation, negotiation or custody, and that can accept any means of payment, including other cryptoassets.[13]

These definitions are included in the concept of intermediation of operations carried out with cryptoassets, which is the provision of environments for carrying out purchases and sales of cryptoassets among the users of such services.[14]

According to article 6,

[t]he provision of information is mandatory for:

I - the cryptoassets exchange domiciled for tax purposes in Brazil;

II - a natural or legal person residing or domiciled in Brazil when:

a) the transactions are carried out on an exchange domiciled abroad; or

b) the transactions are not carried out in exchange.[15]

In the case of article 6(II) discussed above, the information must be provided whenever the monthly value of the operations, alone or jointly, exceeds BRL30,000.00 (about US$5,634.54).[16]

Under article 6,

[t]he obligation to provide information applies to a natural or legal person who carries out any of the operations with cryptoassets listed below:

I - buying and selling;

II - exchange;

III - donation;

IV - transfer of cryptoasset to the exchange;

V - withdrawal of cryptoassets from the exchange;

VI - temporary assignment (rent);

VII - payment in kind;

VIII - issuance; and

IX - other operations that involve the transfer of cryptoassets.[17]

Article 7 of Normative Instruction No. 1888 specifies the information that must be provided for each operation,[18] while article 10 details the penalties applicable to a natural or legal person who fails to provide the mandatory information pursuant to article 6, provides them outside the deadlines set in article 8, or omits information or provides inaccurate, incomplete or incorrect information.[19]

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III. Tax Treatment of Block Rewards

As discussed in Part II.A., above, apparently, block rewards have yet to be clearly regulated in Brazil. The tax treatment provided by the tax authority in the country only determines that gains obtained from the sale of virtual currencies are taxed if they exceed a certain amount. No specific information was found regarding the taxation of reward tokens, tokens acquired by mining or staking, or the tax treatment of tokens received through airdrops and hard forks.

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Prepared by Eduardo Soares
Senior Foreign Legal Specialist
January 2021


[1] Banco Central do Brasil (BACEN), Policy Statement No. 25,306 of February 19, 2014, https://perma.cc/NC7T-TVSR.

[2] Id.

[3] Lei No. 12.865, de 9 de Outubro de 2013, https://perma.cc/5ZNY-3KVD (in Portuguese)

[4] BACEN, Policy Statement No. 25,306 of February 19, 2014, supranote 1.

[5] Id.

[6] BACEN, Communiqué 31,379 of November 16, 2017, https://perma.cc/AW9H-P33P (unofficial English translation).

[7] Id. para. 7.

[8] Institucional, Receita Federal, https://perma.cc/FLG2-SQTC. “The Special Secretariat of the Federal Revenue of Brazil is a specific, singular body, subordinate to the Ministry of Economy, exercising essential functions for the State to fulfill its objectives. It is responsible for the administration of taxes within the competence of the Union, including social security taxes, and those levied on foreign trade, covering a significant part of the country’s social contributions.”

[9] Ministério da Economia, Secretaria Especial da Receita Federal do Brasil, Perguntas e Respostas 2020: Imposto sobre a Renda da Pessoa Física (2020), https://perma.cc/PGN6-3U4M.

[10] Id. at 186, Question 445.

[11] Id. at 248, Question 606.

[12] Instrução Normativa RFB No. 1888, de 3 de Maio de 2019, art. 1, https://perma.cc/6LAZ-S4BD.

[13] Id. art. 5.

[14] Id. art. 5, sole para.

[15] Id. art. 6.

[16] Id. art. 6, § 1.

[17] Id. art. 6, § 2.

[18] Id. art. 7.

[19] Id. art. 10.

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Last Updated: 02/05/2021