Brazil has introduced a new law that allows the local tax agency, Department of Federal Revenue of Brazil, to gather information from local cryptocurrency exchanges on customer transactions in order to prevent crypto tax evasion.
The new laws are going to come into force starting in September 2019 and will cover any and all legally registered cryptocurrency exchange in the country.
When it comes to Brazilian citizens trading cryptocurrencies on foreign platforms, it will be up to the traders themselves to report their trading volumes exceeding $8000.
The reports will have to include the assets used, the date and type of the transaction as well as personal information such as ID number and the service fees paid.
The new rule is identical to nearly all other jurisdictions in the world that are enforcing crypto tax laws, therefore the Brazilian government has more than enough case studies to refine their law should it need some updates.
Many are saying that imposing these new reporting laws is not going to improve the evasion cases in the country. By putting the responsibility on the traders that use foreign exchanges, the government is actively cutting off its source of information, which is the company themselves.
Many cases have been spotted in the past where traders used gaming platforms and third-party ewallets in order to withdraw their profits and avoid the tax man.