IR 2022: see how to declare crypto assets in this year’s income tax

The 2022 Income Tax brought some innovations in the declaration process, and one of them is new categories specific only to cryptocurrencies, such as bitcoin, NFT and other digital currencies.

Anyone who has more than R$5,000 in investments of this type must also declare them to the IRS.

The declarations began on Monday (7) and the deadline ends on April 29. Delivery is mandatory for those who had taxable earnings above BRL 28,559.70 in 2021 or exempt and non-taxable income above BRL 40 thousand.

O CNN Brasil Business spoke with Valdir Amorim, tax consultant at the accounting consultancy IOB, to explain how to fill in the information about cryptocurrencies in the new declaration model. See the main steps below:

Assets and Rights Sheet

This year, the Assets and Rights form, where taxpayers must inform their assets (such as real estate, vehicles and financial investments), was reorganized into nine large groups, including a new group just for crypto assets.

To declare cryptocurrencies, the user must select group 8, of cryptoassets, and, within it, select the code that specifies the types of digital currencies they have.according to the table below.

It is necessary to inform the amount applied, the type of currency and the data of the brokerage or digital wallet where it is in custody.

The value of the application must be filled in taking into account the value of the acquisition, and not the current quotation or other dates.

The declaration is mandatory for each type of cryptocurrency in which the investor has at least BRL 5,000 invested. Below this value, the asset declaration is optional.

Sale and capital gain

If the investor has made sales of their cryptocurrencies throughout 2021 with capital gain – that is, for an amount greater than what they bought –, it means that they had income with that asset and must also declare them.

Cryptocurrency sales are only taxed when the total value of coins sold in a single month exceeds BRL 35,000. In these cases, the taxpayer must declare the transaction in the IR 2022 on the Capital Gains form.

If the sale value in a month was less than R$ 35 thousand, there is no incidence of tax and the operation must then be filled in the form “Exempt and non-taxed income”.

The cut of the exemption value is made considering the total sale value and not the value of the profits obtained by the investor.

A person who, for example, bought BRL 10,000 in bitcoins and then sold them for BRL 30,000 (less, therefore, than the floor of BRL 35,000), had a capital gain of BRL 20 thousand and this value enters the group of Exempt Incomeexplains Amorim, from the IOB.

Those who bought BRL 10,000 and sold for BRL 36,000 – more than the BRL 35,000 established – had a profit of BRL 26,000 that will be taxed, according to the IR table for this type of application. (see more below).

People who sold assets at a loss (for a value lower than the purchase price) are not taxed, even if the sale value exceeds BRL 35,000.

Paying tax on the sale of cryptocurrencies

The payment of the tax must be made by the investor himself whenever the value of sales of crypto-assets in a single month exceeds BRL 35 thousand and at the time the transaction is carried out.

If, for example, the sale took place in April 2021, he has until the last business day of the following month (May) to pay the tax.

This must be done through a separate program, the GCAP, also downloaded from the Federal Revenue. There, the transaction values ​​must be informed and the invoice for the payment of the applicable tax issued.

At the time of the IR 2022 declaration, it is possible to import this data from GCAP directly from the declaration form in the IR program of the Revenue.

The income tax rates on profits from cryptocurrency sales are:

• Capital gain of up to BRL 5 million: 15%
• From BRL 5 million to BRL 10 million: 17.5%
• From BRL 10 million to BRL 30 million: 20%
• Over BRL 30 million: 22%