If you bought more than BRL 5,000 in bitcoins or other cryptocurrencies, you must inform the possession and trading of virtual currencies in the Income Tax 2022. The Federal Revenue created specific codes in the “Assets and Rights” form to inform cryptocurrencies. See in this article how to fill out the declaration.
In addition, if you sold more than BRL 35,000 per month, any profits from these operations are subject to capital gain tax, which must be paid in the month following the sale. That is, if you have not yet paid tax on profits from the cryptocurrencies sold last year, you are already in debt to the IRS.
For monthly earnings of up to R$5 million, the tax is 15% on profit. The rate gradually increases above this amount.
If the payment is late, the fine is 0.33% per day, up to a limit of 20%, plus interest of 1% per month. Here’s how to fill out the IR 2022 return, collect tax on cryptocurrency gains correctly and pay any back taxes.
Cryptocurrency must be declared in the Assets and Rights sheet
The Federal Revenue requires that the possession of virtual currencies above R$ 5 thousand be informed in the IR 2022. Cryptocurrencies must be declared as if they were an asset, such as a house, a car or a financial investment.
For each type of cryptocurrency purchased, open a new form in the declaration. Don’t mix bitcoin and ether purchases, for example.
Open the “Assets and Rights” form in the IR 2022 declaration program and click on “New”. Let us know if the purchase was made by you or one of your dependents.
From this year’s declaration, the Federal Revenue created a group (08-Cryptoactives) and specific codes to inform virtual currencies. See what the codes are:
01 – Bitcoin (BTC);02 – Other cryptocurrencies, known as altcoins: Ether (ETH), Binance Coin (BNB), XRP (Ripple), Bitcoin Cash (BCH), Litecoin (LTC), Cardano (ADA), Solana ( SOL), Dogecoin (DOGE), among others.03 – Stablecoins, such as Tether (USDT), Brazilian Digital Token (BRZ), USDC, Binance Dollar (BUSD), TrueUSD (TUSD), DAI, Paxos Gold (PAXG), Gemini dollar (GUSD), among others.10 – NFTs (Non-Fungible Tokens): Tokens representing rights over digital or physical goods, such as collectibles, works of art and real estate.99 – Other crypto assets not included in codes 1, 2, 3 or 10: Fan Tokens, Precatório Tokens, Consortium Tokens, Carbon Credit Tokens, receivables, among others.
Detail the purchase of the currency in the “Discrimination” field. Enter which cryptocurrency you purchased, the amount purchased, date of purchase and the name and CNPJ of the brokerage firm where the transaction took place. If the purchase was made directly from another person, inform their name and CPF.
It is also important to inform where cryptocurrencies are held (kept). If they are in a company or brokerage, inform the name and CNPJ. If you keep virtual currencies in a digital wallet, please inform the model used.
If you didn’t have cryptocurrencies in 2020, fill in the “Status on 12/31/2020” field with zero value. In the “Status on 12/31/2021” field, enter the amount paid in reais.
If you already had bitcoins or other virtual currency and bought more, add the 2020 value to the 2021 purchases and enter the result in the “situation on 12/31/2021” field.
If you already had cryptocurrencies in 2020 and did not buy more in 2021, just repeat the value of the field “status on 12/31/2020” in the field “status on 12/31/2021”.
Do not update the value of coins by the current quote. What counts for the IR statement is how much you paid at the time of purchase.
If you have already declared cryptocurrencies last year and used the code “81 – Bitcoin Cryptoactive” or “99 – others”, update the declaration form and declare your digital currencies according to one of the codes informed above.
I bought bitcoins abroad. Do I have to declare?
Yes. Anyone who bought bitcoins or other digital currencies through a brokerage (“exchange”) or another person abroad is also required to declare possession of the good. The declaration must be made in the same way.
In the “discrimination” field, enter the purchase details, name and country of origin of the brokerage firm. Enter the equivalent amount paid in reais on the date of purchase. On the Central Bank website it is possible to consult the exchange rate of different currencies on specific dates.
And who sold cryptocurrencies in 2021?
Anyone who sold cryptocurrencies last year and had already declared their possession in 2020 must write off the asset in this year’s declaration. To do so, enter the details of the sale in the “Discrimination” field.
Repeat the value declared in 2020 in the “situation as of 12/31/2020” field and put zero in the “situation as of 12/31/2021” field.
If you sold part of the coins, reduce the 2021 value proportionally to the amount sold. For example, you had 10 bitcoin declared for BRL 300,000, but you sold half of it in 2021. Then enter the balance of BRL 150,000 in the “status on 12/31/2021” field.
Sales over BRL 35,000 per month are subject to tax
If you sold more than BRL 35,000 worth of cryptocurrencies within the same month of 2021, any profit from this operation is subject to capital gain tax. Monthly sales below this amount are tax exempt.
Taxation is progressive, varying according to the size of the profit:
15% on monthly net gain of up to BRL 5 million17.5% on gain above BRL 5 million and below BRL 10 million20% on gain above BRL 10 million and below BRL 30 million22, 5% on monthly earnings above BRL 30 million
Tax must be paid in the month following the sale
The calculation and collection of the tax on capital gains with cryptocurrencies is the responsibility of the taxpayer.
There is a specific program for declaring last year’s capital gains, GCAP 2021, which must be downloaded by the taxpayer on the IRS website.
Payment of the tax must be made by the last business day of the month following the sale. For example, if you sold bitcoins in March 2021, the tax should have been collected by April 30th of that year.
To pay the tax you must complete the GCAP 2021 and generate a Darf (federal collection document) with your data (name, telephone and CPF) and the “revenue code” with the number 4600, referring to capital gain tax in sale of goods.
It is necessary to generate a Darf for each month of the year in which there were cryptocurrency sales above BRL 35,000 with a profit.
The GCAP program does not allow you to offset profits against any losses from the sale of cryptocurrencies in previous months, as in stock trading.
See how to generate new Darf for back tax
If you have not made the payment within the correct period, it will be necessary to generate a new Darf, with interest of 1% per month and a fine of 0.33% per day, which can reach 20% of the amount due. To calculate the Darf with fine and interest, use the Sicalcweb program, available on the Revenue website.
It is necessary to calculate the fine and interest and generate a new specific Darf for each month of 2021 in which there was tax payable.
Don’t forget to transfer the GCAP information to the IR 2022
After completing the 2021 GCAP and generating the monthly capital gain tax Darfs, you must transfer the program information from the 2021 GCAP to the 2022 IR return.
In the GCAP 2021 program, select the command “Export to IRPF 2021” and save the file in an easily accessible folder on your computer.
Next, open the IR 2022 declaration program and locate the “Capital gains” tab, located in the menu on the left side of the program screen. Click on the “2021 GCAP Import” item.
A new window will appear in the program. Select the folder where you saved the GCAP file and click “Import” to complete the process.