How to Report Crypto Income in Brazil: Your Essential Tax Compliance Guide

With Brazil emerging as a major crypto market in Latin America, understanding how to report cryptocurrency income is crucial for investors. The Receita Federal do Brasil (RFB) requires all crypto transactions to be declared, with non-compliance risking heavy penalties. This comprehensive guide breaks down Brazil’s crypto tax regulations into actionable steps, helping you avoid common pitfalls and file accurately.

Understanding Brazil’s Crypto Tax Framework

Since 2019, the RFB classifies cryptocurrencies as “financial assets” subject to capital gains tax. Key regulations include:

• Monthly Threshold: Reporting is mandatory if your total crypto sales exceed BRL 35,000 in any calendar month.
• Tax Rates: Progressive rates from 15% to 22.5% apply to gains, calculated as selling price minus acquisition cost.
• Reporting Method: All transactions must be declared annually via the DIRPF (Declaração do Imposto de Renda Pessoa Física).
• Foreign Exchanges: Transactions on international platforms (e.g., Binance) still require reporting to RFB.

Step-by-Step Guide to Reporting Crypto Income

1. Track All Transactions
   Log every trade, transfer, and conversion with dates, values in BRL (using exchange rates at transaction time), and wallet addresses. Use tools like Cointracking or RFB’s own spreadsheet template.
2. Calculate Taxable Gains
   Apply the FIFO (First-In-First-Out) method to determine acquisition costs. Subtract this from disposal value to establish gains. Remember: Peer-to-peer trades and crypto-to-crypto swaps are taxable events.
3. Complete DIRPF Forms
   In the annual declaration:
   • List assets in Bens e Direitos (Goods and Rights) section
   • Declare gains in Rendimentos Isentos e Não Tributáveis (Exempt Income) using code 20
   • Report losses separately to offset future gains
4. Pay Taxes Due
   If annual gains exceed BRL 35,000, pay via DARF (Documento de Arrecadação de Receitas Federais) by the last business day of April following the tax year.

Critical Mistakes to Avoid

• Ignoring Small Transactions: Even trades below BRL 35,000/month must be recorded for cumulative reporting.
• Miscalculating Cost Basis: Forgetting fees or incorrect FIFO application leads to inaccurate gains.
• Omitting DeFi Activities: Yield farming, staking rewards, and airdrops are taxable income.
• Missing Deadlines: DIRPF submissions are due by April 30th annually, with late filings incurring minimum BRL 165 fines.

Crypto Tax Reporting FAQ

Do I need to report if I only bought crypto and didn’t sell?

Yes. All cryptocurrency holdings must be declared in the Bens e Direitos section of DIRPF regardless of sales activity, with values converted to BRL at year-end rates.

How are crypto losses handled?

Losses can be offset against capital gains from other assets (stocks, property) in the same year. Unused losses carry forward for 5 subsequent tax years.

Is there a tax exemption for small amounts?

No blanket exemption exists, but no tax is owed if monthly sales are ≤ BRL 35,000. However, all transactions still require annual declaration.

What if I used foreign exchanges?

Brazilian residents must report global crypto activity. Maintain records of foreign transactions and convert values to BRL using the PTAX exchange rate from Banco Central do Brasil for each transaction date.

Pro Tip: Use RFB’s Programa GCAP to automatically import exchange data. For complex portfolios, consult a contador (accountant) specializing in crypto taxation. Staying compliant not only avoids penalties but establishes crucial financial history for loans and investments.