Taxpayers in Brazil have only a couple of days left to file their annual tax returns. Investors who had more than 5,000 reals worth of cryptocurrency in 2020, a little less than $1,000, are obliged to report the funds on their income tax declarations this year. Brazilians who fail to do that on time face hefty fines.
Deadline for Tax Filing in Brazil Expires Midnight May 31
Brazilian citizens are required to file their 2021 income tax returns before June 1. This year, the deadline was extended by a month due to the coronavirus pandemic which took a heavy toll on South America’s largest economy. Failure to report revenues and tax obligations will result in fines starting at around $30 and going up to 20% on the tax due, Portal do Bitcoin warned readers recently.
Taxpayers who kept over 5,000 reals worth of coins in their wallets, or $960 at the current exchange rate, must report the crypto holdings to Receita Federal, the country’s internal revenue service. This year, the tax agency adopted dedicated codes on the assets and rights form for bitcoin (BTC) – 81, other cryptos such as ETH, BCH, XRP, and LTC – 82, and digital tokens – 89.
Although Brazilians are obliged to report the cryptos, not all of them will have to pay tax as it’s levied at capital gains exceeding the monthly exemption limit of 35,000 reals (approximately $6,700). Crypto profits above the threshold will be charged with capital gains tax according to a progressive scale, the news outlet elaborated.
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