Revenue launches new rules for cryptocurrencies and shuts down P2P sellers

Brazil’s Federal Tax Agency (RFB) has launched new rules for declaring cryptocurrencies. The measure was announced in Consultation Solution 218 of the General Coordination of Taxes, which clarifies the guidelines regarding transactions with cryptocurrencies.

According to the new guidelines, companies are allowed to issue them utility tokens must provide information about these operations to the RFB, in accordance with art. 5th of IN RFB No. 1,888, of 2019.

“The legal entity classified as a stock exchange within the meaning of art. 5e, item II, of the above-mentioned IN, must provide information on both operations involving cryptoactive substances carried out directly by it (for example, the issuance of utility tokens), and operations carried out by its users through an environment made available by it, including conducted peer-to-peer operations on its digital platform.” — Says the Tax Authorities.

First of all, it is important to clarify that “utility tokens” are digital tokens that give the holder the right to access or use a product or service offered by the issuing company. You can think of them as digital ‘coupons’: they do not grant an interest in the company, but rather a user benefit.

One of the best known is BNB (Binance Coin), launched by Binance in 2017. The token offers users a number of benefits including fee discounts, access to new cryptocurrencies, the ability to process transactions and pay fees on Binance Chain.

The RFB’s regulation of utility tokens is thus a sign that such assets are increasingly on the authorities’ radar.

Query solution 218 (Figure.RFB)
Query solution 218 (Figure.RFB)

Revenue closes the fight against P2P cryptocurrency sellers

Cryptocurrency sellers who transact directly with others – Peer to peer (P2P)have achieved the turnover target, as they will now no longer be considered as simple users or investors, but rather as brokers.

According to the rules, P2P sellers will have to declare all their transactions, according to art. 6e, item II, of the same normative instruction. If they don’t file returns, revenue may interpret the move as an attempt at tax evasion and impose unpleasant penalties.

Sellers of P2P cryptocurrencies will not only have to declare their own transactions, but also inform the IRS who they transacted with, which could hinder the P2P market in Brazil.

“If a legal entity, even a non-financial one, offers a digital platform on which its users can directly carry out transactions with cryptoactive substances (peer-to-peer transactions), this falls within the definition of art. 5e, Item II, of IN RFB No. 1.888, of 2019, remains obliged to provide information on transactions with cryptoactives, including their users, based on Art. 6e, point I, of the above-mentioned Normative Instruction.”

NFTs for real estate

In a separate document focused solely on NFTs, the IRS clarified the new rules for NFTs. non-fungible tokens that represent physical real estate.

According to Consultation Solution 217, companies will not be obliged to provide information on the activities with these NFTs, as they do not fall under the concept of ‘cryptoasset’ as provided for in RFB Normative Instruction No. 1,888/2019.

Consultation solution 217 (Image: RFB)
Consultation solution 217 (Image: RFB)

In addition, companies that mediate the sale or confirm ownership of NFTs for real estate rental are also not required to submit the Dimob (Declaration of Information on Real Estate Activities).

The Consultation Solution clarifies that transactions involving NFTs are typically the result of intermediation by brokerage firms or, failing that, carried out by the parties themselves, with the company offering related services playing the role of an electronic platform that provides the ability to record such transactions.

However, the Consultation Solution also warns that the modus operandi of companies working with NFTs may have been made unfeasible in some states and that companies working with NFTs representing physical property should therefore be aware of each state’s specific legislation.

Finally, the IRS is unveiling important guidance for companies working with real estate NFTs as it clarifies that these assets are not considered cryptoactive, reducing the bureaucracy and costs associated with providing information to the RFB.

Source: Live Coins

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