Brazil Clarifies Taxes on Cryptocurrency Conversion

This week, the Brazilian Federal Reserve Board (RFB) announced that investors are required to pay income taxes on converting one cryptocurrency to another, and trading crypto pairs incurs a tax liability regardless of whether there was an intermediary conversion to the the Brazilian real, the country’s local currency.

For example, converting Bitcoin to Ethereum or Ethereum into Litecoin would require a tax to be paid. The statement was published in the Diário Oficial da União, and outlined the new tax policy: ““The capital gain calculated on the sale of cryptocurrencies, when one is directly used in the acquisition of another, even if the acquisition cryptocurrency is not previously converted into reais or other fiat currency, is taxed by the Individual Income Tax, subject to progressive rates, in accordance with the provisions of art. 21 of Law No. 8,981, of January 20, 1995.”

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