Brazil is reportedly considering imposing a tax on the use of cryptocurrency for international payments, as it aligns its rules with a global standard for sharing tax data.
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Brazil is reportedly weighing a tax on the use of cryptocurrencies for international payments as it moves to adopt a global crypto tax reporting data exchange framework.
A Tuesday Reuters , citing “officials with direct knowledge of the discussions,” claims that the Brazilian government aims to tax cryptocurrency use for international payments.
During the confidential talks, representatives of the country’s finance ministry reportedly expressed interest in expanding the Imposto sobre Operações Financeiras (IOF) tax to include some digital asset-based cross-border transactions.
Brazil’s Federal Revenue Service also yesterday that its reporting rules for crypto-asset transactions will be aligned with the global Crypto-Asset Reporting Framework (CARF), in a legal dated Nov. 14.
This would provide the tax department with access to citizens’ foreign crypto account data through the Organisation for Economic Co-operation and Development’s global reporting and data-sharing standard. The move comes as no surprise, with Brazil having a statement in favor of CARF in late 2023.
The move follows Monday reports that the White House is reviewing the CARF and a similar , the collective body of EU27 finance ministers. In late September, the United Arab Emirates also the data-sharing program.
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Brazil moves to close a crypto loophole
Cryptocurrencies are currently exempt from the IOF tax; however, crypto capital gains are . IOF is a federal tax charged on financial transactions — mainly foreign exchange, credit, insurance and securities operations.
The two sources cited by Reuters said the move aims to close a loophole while also boosting public revenue. The current exclusion of digital assets from IOF is viewed as a loophole, as those assets — especially stablecoins — can be used as a de facto foreign-exchange or payment rail while skirting the taxes imposed on traditional means to do so.
The officials said the rules aim to “ensure that the use of stablecoins does not create regulatory arbitrage vis-a-vis the traditional foreign-exchange market.”
Related:
Brazil clamps down on crypto loopholes
The move is in line with the Brazilian central bank’s introduction this month of new rules treating some stablecoin and crypto wallet operations . The new rules extend existing rules on consumer protection, transparency and Anti-Money Laundering to crypto brokers, custodians and intermediaries.
In April, Brazilian judges were from debtors, closing another loophole. “Although they are not legal tender, crypto assets can be used as a form of payment and as a store of value,” a translated version of the Superior Court of Justice’s memo read.
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