The South American nation has joined the rank of countries to have provided a sort of regulation for the cryptocurrency industry.
According to a document released by the Department of Federal Revenue of Brazil (RFB), a monthly report on cryptocurrency operations will now be expected of crypto exchanges and other industry participants.
The paper stated that cryptocurrency exchange operators will now have to submit a monthly report which will reveal the amount of transactions conducted, as well as the identity of customers.
In addition, firms and individuals that carry out cryptocurrency transactions on foreign crypto exchanges will have to report with the tax regulators if the transactions exceed 10,000 Brazilian reals ($2,700) per month.
A range of fines will also be imposed on those who delay tax declaration at the end of the month or submit an incomplete/false report at the end of the month.
For a delay in the tax declaration, the tax draft stipulates a fine in the sum of 1,500 Brazilian reals ($400). Submitting an incomplete/false report will result in a fine that is worth 3% of the transaction value during the month under consideration.
The RFB also reckons that there is a chance that changes be made to the draft. Public proposals on the document is open from Oct. 31 till Nov. 19.
Crypto Industry Growth Numbers In Brazil Is Staggering
The reason behind the decision to release a taxation draft for the Brazilian crypto ecosystem is not far-fetched. A section on the regulatory draft stated that the measure was taken because of the rate of crypto industry growth in Brazil.
The number of users who are signed up with Brazilian native crypto exchanges has already exceeded the number of users registered at B3, the second oldest stock exchange in the country.
Aside from this, the paper stated that the daily volume of transactions conducted by five major Brazilian crypto exchanges is now over 8.3 million reals (around $2.2 million), a figure that surpasses that of some local banks.
It is therefore unprecedented that a taxation rule would have to be introduced at a certain stage, and the RFB decided to make it now rather than later.