Deputies cancel taxes on cryptocurrency exchange, contradicting federal tax authorities

The Finance and Taxation Committee of the Chamber of Deputies has approved draft Legislative Decree (PDL) 3/22, which nullifies the effects of the guidelines of the Federal Tax Agency of Brazil according to which the exchange of cryptocurrencies or digital currencies between people is a taxable event for income tax (IR), by the progressive table. The annulment took place in the latter

The rapporteur, deputy Chiquinho Brazão (União-RJ), recommended approval. “If one crypto asset is exchanged for another, bringing the operation closer to that in which a capital gain is verified, then there is no need to talk about an increase in wealth, but only and only portfolio diversification“said the rapporteur.

“Through the IR, a tax modality was created without any provision in the laws pertaining to taxationsaid the author of the project, Deputy Kim Kataguiri (União-SP). “This completely unlawful interpretation by the Tax and Customs Administration exceeds regulatory authority“, he said in defense of the proposed measure.

The project will still be analyzed by the Constitution and Justice and Citizenship Committee. Then it goes to the plenary. The information comes from the bureau Câmara de Notícias.

When did the Federal Tax Agency of Brazil determine that the exchange of cryptocurrencies should be taxed?

Since 2019, it has decreed through Normative Instruction 1.888/2019 that all Brazilians who invest in cryptocurrencies must declare and pay taxes on their activities.

Over time, other rules emerged for Brazilians to meet new obligations.

And one of them is precisely the COSIT Consultation Solution No. 214 of December 20, 2021, which implied that investors had to pay taxes on the sale of cryptocurrencies.

“The capital gain calculated on the sale of cryptocurrencies, when one is used directly in the acquisition of another, even if the acquisition cryptocurrency has not previously been converted into real or other fiat currency, is taxed by the income tax of the individual, subject to against progressive rates, in accordance with the provisions of art. 21 of Law No. 8,981 of January 20, 1995.”

But in February 2022, deputy Kim Kataguiri submitted a request to suspend the measure announced by the RFB in public consultation. According to him, the federal tax authorities intended to introduce a new tax levy that does not rest on the agency, and the measure should be suspended. Suspension of rules is a legislative measure in Brazil.

Speaking at the Finance and Taxation Committee, Deputy Paulo Guedes (PT-MG) stated that Brazil’s Central Bank President Roberto Campos Neto will visit the committee on September 27 at 10am.