Questions and Answers – Declaration and Taxation of Cryptoassets in Brazil in 2025 – Base Year 2024

Who Must Declare Cryptoassets and Virtual Assets in Brazil

Individuals residing in Brazil must declare and pay taxes on income generated within the country and abroad. If you reside in Brazil, you are obligated to declare income derived from your cryptoassets, regardless of where they are stored, whether within Brazilian territory or internationally.

The enactment of Law 14.754/2023 established specific rules for the declaration and taxation of cryptoassets that qualify as virtual assets considered to be located abroad. It is essential to evaluate whether your cryptoassets are classified as being located in Brazil or abroad to determine the applicable declaration and taxation method.

Residency Status for Tax Declaration Purposes

Residency status in Brazil for tax purposes is determined by specific criteria established by the Brazilian Federal Revenue Service (Receita Federal). The official definition can be found on the Receita Federal do Brasil website. Understanding your residency classification is crucial for determining your tax obligations and the appropriate reporting requirements for your cryptoassets.

Required Declarations for Cryptoassets and Virtual Assets

Two main types of declarations apply to cryptoassets. The first is the annual adjustment declaration (DAA or DIRPF), which must be submitted by all applicable individuals around April and May of the following year. The second is the declaration required under Normative Instruction 1.888/2019, which focuses on reporting cryptocurrency transactions to the Brazilian tax authorities.

These declarations serve different purposes and may be required simultaneously. The annual adjustment declaration encompasses income from all sources, including cryptoasset gains, while the Normative Instruction 1.888/2019 specifically mandates the reporting of all operations involving cryptoassets to the Federal Revenue Service.

Taxation of Cryptoassets and Virtual Assets for Individuals

Cryptoasset taxation for individuals can occur in three distinct ways. Capital gains may be triggered by alienation events—such as sales or exchanges—of cryptoassets located in Brazil. Alternatively, earnings from foreign-located virtual assets or capital gains derived from these assets are subject to taxation. Additionally, income may arise from the acquisition of cryptoassets as remuneration for services rendered.

It is crucial to understand that these taxation scenarios are not mutually exclusive. One type of taxable event does not necessarily eliminate the applicability of another. For example, you may simultaneously be subject to both capital gains tax on the sale of Brazilian-located cryptoassets and income tax on cryptoassets received as payment for services. Careful documentation and classification of each transaction is essential for accurate tax compliance.

Taxation of Income and Capital Gains from Foreign-Located Cryptoassets from 2024 Onwards

Law nº 14.754/2023, implemented through Normative Instruction RFB nº 2.180/2024, fundamentally altered taxation rules for foreign financial investments. This legislation equates virtual assets held abroad with traditional foreign financial investments for tax purposes. These regulations remain applicable as of 2025, governing cryptoassets held abroad that meet the definition of foreign virtual assets.

Under the framework, taxation is now applied through the Annual Adjustment Declaration, with a fixed tax rate of 15% applied to income or capital gains earned from foreign virtual assets. For cryptoassets located in Brazil and those that do not qualify as foreign-held assets, traditional capital gains taxation and income tax rules continue to apply.

Classification of Cryptoassets on International Exchanges

Virtual assets are classified as foreign-located, regardless of the issuer's location, when they are custodied or traded through institutions operating outside Brazil, such as major international cryptocurrency platforms. This classification determination is independent of where the cryptocurrency was originally issued or the physical location of exchange servers, focusing instead on the jurisdiction of the custodial or trading institution.

Understanding this classification is vital because it determines whether assets fall under the new 15% taxation regime for foreign financial applications or remain subject to traditional Brazilian capital gains taxation rules.

Taxation of Exchange Rate Variations on Foreign Virtual Assets

Capital gains and income derived from foreign virtual assets must be calculated in Brazilian reals. When acquiring a foreign asset, the acquisition cost should be converted to reals using the foreign currency purchase rate on the acquisition date. Upon liquidating the operation—whether through asset sale or income withdrawal—the received amount must be converted from foreign currency to reals using the foreign currency sales rate on the liquidation date.

The difference between the value received in reals at liquidation and the acquisition cost in reals represents the taxable gain or income. Exchange rate gains are taxed concurrently with income or capital gains from the foreign virtual asset, following the cash-basis accounting method. Importantly, exchange rate gains are subject to taxation even if the foreign cryptocurrency was originally purchased with foreign-source income.

Compensation of Losses in Foreign Financial Applications

Losses realized from foreign financial investments, including virtual assets classified as foreign financial investments, may be offset against gains from any other foreign financial application, including alternative virtual assets qualifying as such. This compensation can be executed within the same tax year through the Annual Adjustment Declaration.

When losses exceed gains in a particular year, taxpayers may carry forward uncompensated losses to subsequent years for future offset against gains. This provision provides valuable tax planning opportunities for individuals managing diverse foreign investment portfolios that include cryptoassets.

Impact of New Rules on IN nº 1.888/2019 Declarations

The taxation rules established under Law 14.754/2023 do not modify the requirements of Normative Instruction 1.888/2019 declarations. These declarations remain distinct from the Annual Adjustment Declaration and do not establish taxation rules for cryptoassets in Brazil or abroad. Instead, IN 1.888/2019 mandates the reporting of information regarding cryptoasset transactions to the Brazilian Federal Revenue Service.

Domestic cryptocurrency exchanges domiciled in Brazil must file these reports. Similarly, individuals and legal entities residing or domiciled in Brazil must submit these declarations when operations occur through international cryptocurrency platforms or when transactions are conducted outside formal exchanges. As a user of international platforms with a Brazilian tax identification number (CNPJ or CPF) residing in Brazil, you are personally responsible for submitting the IN 1.888/2019 declaration.

Future Reporting Obligations of Foreign Cryptocurrency Exchanges

Law 14.754/2023 established mandatory reporting obligations for companies operating cryptocurrency and virtual asset exchanges in Brazil. Article 44 of this law requires these companies to provide periodic information about their activities and clients to the Brazilian Federal Revenue Service and the Council for the Control of Financial Activities (Coaf).

International cryptocurrency exchanges continue to await specific regulatory guidance from the Federal Revenue Service regarding reporting format, frequency, transaction types to be reported, and other technical details. Until this regulatory framework is finalized, individual users with Brazilian tax identification numbers (CNPJ or CPF) remain responsible for filing their own IN 1.888/2019 declarations. Once the implementing regulations are established, foreign exchanges will comply with these reporting requirements.

Declaration of Brazilian Capital Abroad

Individuals and legal entities residing in Brazil or maintaining a permanent establishment must file the Declaration of Brazilian Capital Abroad (DCBE) when holding foreign capital, including cryptoassets and virtual assets, that meet specific thresholds. Annual declarations are required when foreign-located cryptoassets equal or exceed US$1,000,000 as of December 31 each year. Quarterly declarations must also be filed when cryptoassets equal or exceed US$100,000,000 as of March 31, June 30, and September 30.

Resolution BCB nº 279/2022, Article 7, IX, mandates that information about Brazilian capital abroad, including virtual assets, be reported to the Central Bank of Brazil. Taxpayers must maintain supporting documentation for ten years from the declaration date-base to present to the Central Bank upon request. Proper record-keeping and valuation methodologies are essential for DCBE compliance.

Conclusion

Brazilian tax law imposes comprehensive obligations on individuals holding cryptoassets to properly declare and report these digital assets. The regulatory framework distinguishes between cryptoassets located in Brazil, subject to traditional capital gains taxation, and foreign-located virtual assets, subject to the 15% fixed tax rate on gains and income. Each individual with a Brazilian tax identification number (CNPJ or CPF) remains personally responsible for accurate calculation of gains and losses using transaction records available through exchange platforms, proper classification of assets as domestic or foreign-located, timely submission of required declarations including the Annual Adjustment Declaration, Normative Instruction 1.888/2019 reports, and DCBE filings where applicable. Compliance with these obligations requires careful attention to technical requirements, exchange rate conversions, and documentation maintenance over extended periods. The evolving regulatory landscape, including future exchange reporting obligations, underscores the importance of maintaining meticulous records and staying informed about tax requirements.

FAQ

How to declare income tax on cryptocurrency transactions?

Access the Brazilian Federal Revenue program, go to 'Assets and Rights' > Group 08 – Cryptocurrencies, and report your transaction amounts and holdings according to local tax regulations.