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Brazilian tax authority will summon foreign cryptocurrency exchanges for information
By Marcela Ayres
BRASILIA (Reuters) – Brazil’s tax authority will soon call foreign cryptocurrency exchanges that are not based in the country to explain their operations and how they work with local service providers, government officials told Reuters on Monday.
The Internal Revenue Service is expected to issue an order this week summoning these companies for further information. Unlike exchanges formally established in Brazil, they are not obliged to report transactions made on their platforms.
“It is an area of concern for us to first understand how they operate here, whether there is any illegality or not. We are also concerned about having information on Brazilian wealth subject to taxation here,” said Andrea Chaves, deputy secretary of inspection at the Federal Revenue Agency.
Wagner Lima, risk management coordinator at the Revenue Service, said the government also aims to understand how these exchanges cooperate with service providers in the country to ensure they provide information as required by the Revenue Service under a 2019 regulation.
Exchanges that are not based in Brazil but that operate in the country and also have Portuguese-language websites include Binance, Coinbase, OKX, and KuCoin.
The request comes amid a surge in cryptocurrencies in Latin America’s largest economy.
From January to July 2023, Brazilians declared 133.6 billion reais ($24.6 billion) in cryptocurrencies, a 36.6% increase compared to the same period a year earlier, according to the agency’s latest data of Revenue, which is working on a technology update to release new figures.
Of this total, 14.5 billion reais were declared on foreign exchanges, representing a like-for-like growth of 51.2%. In this case, providing information to the government depends on taxpayers, be they individuals or entities.
($1 = 5.4245 reais)
(Reporting by Marcela Ayres, Editing by Louise Heavens)