Alana Aiche do Carmo Dahrouj
Lawyer at Marcos Martins Advogados
With the growth of the technological world and the innovation it brings with it, cryptocurrencies have been gaining ground in the world market, attracting attention for their ease, independence and transparency in carrying out commercial transactions over the internet.
Bitcoin is one of the best known types of cryptocurrency, which operates anonymously, without any intervention from a financial institution, serving as an alternative to the conventional financial system.
Given the lack of regulation, dealing with its fiscal aspect requires tackling a number of issues. The aim of this article is to analyze and discuss the possible tax consequences of operations carried out with this type of cryptocurrency: bitcoin.
Initially, without an in-depth analysis, as this would require greater care and study on the subject, it is important to outline its legal nature. Bitcoin is considered “sui generis”. Despite being economically measurable, it cannot be treated as mere fiat currency due to its own peculiarities. Therefore, given that its main purpose is to serve as an object for legal relations, it is pertinent to treat it as an asset with economic value.
In fact, while there are no specific regulations regarding the taxation of cryptocurrencies, we have conjured up possible tax incidence hypotheses, which we will now analyze.
– Income Tax – IR:
This is a federal tax established in article 153, III of the Federal Constitution, instituted by article. 43 of the National Tax Code, which is levied on the acquisition of income, whether it is the product of capital, labor or a combination of both, or even on income of any kind.
With a cursory analysis, it is already possible to identify that, under current tax legislation, IR may be levied when there is any increase in assets resulting from the sale of the cryptocurrency, identified by the positive difference between the sale price and the acquisition cost.
In this scenario, the Brazilian Federal Revenue Service (Receita Federal do Brasil) stated the following understanding when answering this question on its website:
The gains obtained from the sale of virtual currencies (bitcoins, for example) whose total sold in the month is greater than R$ 35,000.00 are taxed, as capital gain, according to progressive rates established according to the profit, and the payment of income tax must be made until the last working day of the month following the transaction.[1]
In these terms, it can be concluded that IR may be levied when there is a capital gain on the sale of bitcoin worth more than R$35,000.00.
– Causa Mortis Transmission and Donation Tax – ITCMD
This is a state tax established in article 155, I of the Federal Constitution, regulated by article 35 of the National Tax Code, which is levied on the transfer of ownership of any movable or immovable property, and on the transfer of rights as a result of the death of their owner or gratuitous transfer and assignment.
Thus, since the ITCMD is levied on the transfer of ownership of any movable or immovable property, it is possible that it will be levied on transactions involving cryptocurrencies, due to the nature of the intangible property attributed to them.
Thus, since it is possible for ITCMD to be levied on bitcoins, and given that this is a state tax, it remains to be determined by each state.
– Tax on Services of Any Nature – ISS
This is a municipal tax established in article 156, III of the Federal Constitution, instituted by Complementary Law 116/03, levied on services of any nature duly provided for in the attached list contained in the aforementioned law.
Analyzing the services on the list of services annexed to Complementary Law 116/03, it can be seen that ISS is levied on operations involving bitcoin in two different situations: exchanges (exchange brokers) and cryptocurrency mining.
With regard to exchanges, they are exchange houses that provide intermediation services and may be subject to ISS under the terms of item 10.01 of the list annexed to LC 116/03.
And with regard to cryptocurrency mining activities, these are carried out through the blockchain system, which corresponds to data and application processing services, also provided for in item 1.03 of the aforementioned list.
Therefore, with regard to the hypothesis of ISS levy, there will be the possibility of occurrence both in the intermediation service of exchanges and in the service of bitcoin miners.
In short, cryptocurrencies are gaining ground in the world market. And like any social novelty, there are doubts about its consequences and regulation in the legal sphere.
Given the inexactness of the repercussions in the tax sphere, without any pretense of exhausting the subject presented here, the purpose of this article is to instigate discussion about the possible tax consequences of operations carried out with cryptocurrencies, specifically bitcoins.
All the above considerations make it possible to affirm the need for the competent authorities to take a more active stance in order to regulate cryptocurrencies as a measure to achieve legal certainty.
The team at Marcos Martins Advogados has extensive experience in analyzing legislation, studying possible risks and implementing tax strategies for various sectors, and is qualified to answer all questions aimed at guaranteeing your company’s maximum performance.
[1]DISPOSAL OF VIRTUAL CURRENCIES: 607 – Are the gains obtained from the disposal of “virtual” currencies taxed? In: RECEITA FEDERAL, PIR – Income Tax Program – 2017. Income tax – Individuals: questions and answers, [s.l]: [s.n], 2017.
