Brazil requires overseas cryptocurrency exchanges to provide user information: to eliminate illegal activities and prevent tax evasion

This site (120bTC.coM): Reuters reported that Brazil’s tax agency is expected to summon overseas cryptocurrency exchanges and require them to explain their business operations and cooperation with local service providers. The content is designed to prevent potential illegal activities and obtain financial information about local users to facilitate the implementation of the "overseas investment income tax" passed last year.

Brazil plans to require overseas exchanges to submit local user financial information

According to the Brazilian government, the Federal Tax Service may issue a decree this week and make successive calls to companies providing crypto trading services in Brazil. of overseas exchanges to understand how they operate in the country and confirm whether its citizens are complying with the country’s new tax laws.

Andrea Chaves, Deputy Director of the Inspection Department of the Federal Tax Service, emphasized: Our main concern is the way the exchange operates in Brazil to clarify whether there is any illegal behavior.

On the other hand, Wagner Lima, director of the risk management department of the tax bureau, said: We also hope to understand the details of the cooperation between these exchanges and domestic service providers, and seek to understand the financial and tax affairs of the Brazilian people. Assign information.

Currently, only local cryptocurrency exchanges have transaction reporting obligations, but this is expected to be expanded to offshore exchanges soon.

Previous Kaiko Research report showed that the main overseas exchanges operating in Brazil and having Portuguese websites for local users are:

• Binance

• OKX

• ##Coinbase

• KuCoin

Market share of each exchange’s cryptocurrency trading volume (based on local fiat currency BRL)

Currently, even though Binance is still the largest exchange in Brazil, its market share has dropped since two years The previous 95% decreased to 79%, and was gradually replaced by Brazil’s Mercado Bitcoin and Mexico’s Bitso.

Brazil is crazy about cryptocurrencies, jumping to the seventh largest market in the world this year

• Kaiko Research: Brazil’s cryptocurrency trading volume surges

According to previous reports, Brazil’s BRL-denominated cryptocurrency trading volume increased by 30% this year compared to the same period last year: So far, in terms of legal currency trading volume, the country has become the largest crypto market in Latin America and the world’s largest. The seventh largest market.

At the same time, stablecoins are very popular in the Brazilian market, accounting for slightly more than 50% of the transaction volume, which is better than about 45% of Bitcoin and Ethereum.

• Growth in crypto asset declarations

  
  

In addition, according to data from the local tax bureau, Brazilian citizens declared a value of 1,336 in the first half of last year 100 million BRL (approximately US$24 billion) in crypto assets, an increase of 36.6% compared with the same period last year.

Among them, 14.5 billion BRL (approximately US$2.61 billion) was declared through overseas exchanges, an increase of 51.2%. It is not difficult to see why the local government is trying its best to implement taxation.

• Authorities strengthen taxation

In response to this grand situation, the Brazilian authorities also passed a tax bill in December last year, imposing restrictions on Brazilians’ overseas transactions. Cryptocurrency profits and interest earned are subject to a 15% income tax.

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