In a report published on Thursday (25), the Federal Tax Service of Brazil pointed to future changes in the declaration of cryptocurrencies to align with the model proposed by the Organization for Economic Co-operation and Development (OECD).
The measure aims to implement a more robust policy with regard to Know Your Customer (KYC) systems and to strengthen the fight against money laundering.
Subsequently, the Tax and Customs Administration stated that other countries should adopt the policy proposed by the OECD, functioning as a kind of international regulation.
Future Amendments to the Federal Revenue Regulation 1888
The new policy was proposed in November 2022 by the Organization for Economic Co-operation and Development (OECD). The 104-page document, called CARF in its English acronym, was a request from the G20, a group representing the 20 largest powers in the world.
The Federal Tax Agency highlights that Brazil was one of the first countries to track cryptocurrency trading through Regulation 1888 of 2019, pointing out that it will be updated soon.
“Brazil will be one of the countries to become part of this crypto asset exchange network”pointed the Federal Tax Office to CARF, a model for exchanging cryptocurrency information. “In addition to the financial information already exchanged multilaterally with the Common Reporting Standard (CRS) and bilaterally with FATCA USA, in the pursuit of transparency.”
“In 2023, Normative Instruction RFB No. 1.888 of 2019 will be amended to conform to the international CARF model, including requirements to comply with “anti-money laundering” and “know your customer” (ALM/KYC) principles. established for crypto-assets, in accordance with the recommendations of the Financial Action Group (GAFI) and the regulation of the Central Bank of Brazil.”
The document then points out that more entities will be required to provide information, mainly on products not mentioned in the CARF, such as CBDCs (central bank digital currencies) and other electronic money (e-money) models.
Finally, it is also emphasized that the changes will be announced in advance so that investors can plan and prepare for compliance with the obligation.
The number of cryptocurrency declarations continues to grow
In a note published in early May, the Federal Tax Service highlighted that more than 1.6 million individuals and 61 thousand legal entities have declared investments in cryptocurrencies by March 2023.
Compared to March last year, 2022, the number of CPFs grew by almost 1 million, a record. The number of CNPJs, while high, lagged the month of December 2022, which exceeded 65,000.
Finally, such data shows a great adoption of cryptocurrencies in Brazil, even with the great downward cycle of recent years.
Source: Live Coins
Barry Siefert is an accomplished journalist and author at The Nation View. He is known for his expertise in the field of cryptocurrency, and has written extensively on the topic. With a background in finance and economics, Barry has a deep understanding of the underlying technology and market forces that drive the crypto industry.
