Authorities in Brazil have started fining taxpayers who have failed to declare the amount of digital currency assets they are holding.
To address this particular issue, the Department of Federal Revenue (RFB), the tax authority in Brazil, recently published a new tax code specifying the fines to be imposed on those who are not reporting their cryptocurrency-related transactions.
This new tax code was imposed as an addendum to the code imposed in August, which required all citizens to report any and all transactions involving cryptocurrencies. The code was first introduced as a policy in May.
According to the new tax code, those who do not report the crypto transactions will be subject to penalties ranging from 500 Brazil reals (BRD) ($120) up to 1500 BRD ($360). These fines can be levied against individuals, brokerages, and companies. It states that the fine can be imposed for failure to report any type of transaction, including deposits, donations, barters, and withdrawals.
Brazilians reportedly made over 2.5 million transactions using digital currencies in an eight-week period: 1.5 million of these transactions were made within the country, and 1 million were made in September alone. This accounted for $3.3 billion worth of cryptocurrencies exchanged. However, the report did not cite how many of these transactions were reported in accordance with the tax code.
The new fines may be in response to a recent crisis at the RFP. In September, the tax agency reported that they were expecting to run out of funds by the end of the month unless the government of Brazil would unlock financial resources the tax agency required to meet its financial responsibilities. This would have stopped the agency from terminating agreements with contractors, forced them to cease the issuance of taxpayer registry identification numbers and made them unable to pay income tax refunds.
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