After the global economic recession caused by the SARS-CoV-19 pandemic, many Brazilians see the digital currency market as a profitable and simple investment. Also known as cryptocurrencies or virtual currencies, such financial assets resemble currency in its traditional sense, with the big difference that the latter is controlled by an agency or government – the Casa da Moeda in the case of Brazil, while the firsts (majority) do not have a regulatory body. Promising to make the financial system easier, cryptocurrencies do not need intermediaries in their transactions, proposing transactions through a system called blockchain[1], composed of two mechanisms: the block capable of recording the movement of assets and the chain, an algorithmic function that generates a fingerprint, enabling individualize each cryptocurrency[2].
When the subject becomes the regulation of digital currencies in the national scenario, it is imperative to highlight the BACEN Communiqué No. 25.306/2014, which even differentiates cryptocurrencies from the “electronic currency” dealt with by Law No. 12.865/2013. Among the main points highlighted by the then Head of Monetary Policy Aldo Luiz Mendes are: the non-issuance or guarantee of currencies by the monetary authority, no guarantee of conversion to the official currency and the lack of backing in any real financial asset. Also, Circular Letter No. 1/2018/CVM/SIN of the Securities and Exchange Commission highlights the following: “Based on said uncertainty, the interpretation of this technical area is that cryptocurrencies cannot be qualified as financial assets, for the purposes of the provided for in article 2, V, of CVM Instruction No. 555/14, and for that reason, its direct acquisition by the investment funds regulated therein is not allowed”[3].
In this way, the almost averse stance that the Banco Central illustrates towards cryptocurrencies is extracted, in addition to the direct prohibition by the SEC for investment funds to directly obtain virtual currencies, given that such are not considered financial assets.
In another tune, however, the Federal Revenue Service of Brazil equates digital currencies even with goods, for Income Tax purposes. Amounts greater than BRL 5,000.00 invested in cryptocurrencies must be declared in the IR as “Assets and rights”, and sales of virtual currencies in an amount greater than BRL 35,000.00 per month are subject to capital gain tax withholding. In addition, virtual currencies are currently levied in addition to the Income Tax, the IOF at the federal level, the ITCMD and ICMS in the states and the ISS in the municipalities. Therefore, the lack of definition of crypto-assets as assets, commodities, goods or in fact currencies is notorious. Therefore, the question remains: What is the legal nature of cryptocurrencies?
According to Law No. 9.069 of 1995, the unit of the National Monetary System is the REAL, and the existence of another currency is not allowed in the country, in view of the monopoly established by the Banco Central. It is recalled at this point that BACEN recognizes the existence of electronic currencies (Law No. 12.865/2013), clarifying that such – see Communiqué No. 31.379/2017 – must be referenced in reais or in another currency established by the sovereign government. Therefore, domestically, it is not possible to claim that cryptocurrencies are in fact currencies, since they do not express REAL or are linked to a foreign government.
The Federal Revenue Service of Brazil proposes that digital currencies be understood as goods equivalent to financial assets:
In April 2014, the Federal Revenue Service of Brazil established how it would handle the holding and use of bitcoins and other digital currencies. Brazil is treating digital currencies as financial assets, with the IRS imposing a 15% tax on capital gains at the time of sale, however, there are some key differences that can be positive for bitcoin users in the country. Those who sell fewer coins with a value of less than R$35,000.00 will not have to pay the tax. This means that bitcoin users in Brazil will not have to calculate capital gains taxes when making small purchases. The Federal Revenue also requires annual accounts statements from those who have more than BRL 1,000.00 in digital currency holdings.[4]
In the same sense of considering digital currency as a good or financial asset, the Superior Court of Justice defined that a financial transaction involving cryptocurrency is understood as a legal transaction for the transmission of a movable asset (Special Appeal No. 1,696,214 – SP).
Despite possible comments and separate definitions in the national legal system, the country still does not have any law that regulates cryptocurrencies. Bill No. 3.825/2019 is currently pending in the Federal Senate – approved by the Economic Affairs Commission (CAE), however, as a logical consequence, such provisions are not in force, nor do they produce legal effects. Even so, authorities from all categories of federative entities have established the incidence of various taxes on operations involving digital currencies.
It is true that when defining cryptocurrency as a movable asset, according to Normative Instruction No 1.888/2019, it can in fact be taxed, not being possible to claim a fulminant violation of the principle of legality, pillar of national tax law. However, when the aforementioned principle is understood in Roque Carraza’s[5] teachings as an effective limitation to the exercise of tax jurisdiction and the requirement that: “Only the law – taken in the technical-specific sense of an act of the Legislative Power, enacted in obedience to the procedures and formalities required by the Constitution – it is given (the power to) create or increase taxes”, it seems to us delicate to regulate cryptocurrencies by mere normative instruction, a purely administrative act by nature.
Surrounded by debates, the taxation of cryptocurrencies and operations that involve them comes up against the conflict between the necessary advance of the Brazilian tax system in order to follow real market trends and transactions, and the institution of legality as a guiding principle of Public Law as a whole. As long as a law capable of systematizing and defining the situation of digital currencies in the country is not passed, there will remain a situation of uncertainty and conflict between the entities of the State itself.
[1] ULRICH, Fernando. Bitcoin: A moeda na era digital. 1. ed. São Paulo: Instituto Ludwig von Mises Brasil, 2014.
[2] NAKAMOTO, S. Bitcoin: Um Sistema de Transação de Dinheiro Ponto-a-Ponto. Tradução de Rhlinden. Available at: https://bitcoin.org/files/bitcoin-paper/bitcoin_pt.pdf.
[3] Ofício Circular CVM/SIN 01/18. Available at: https://conteudo.cvm.gov.br/legislacao/oficios-circulares/sin/oc-sin-0118.html.
[4] ANDRADE, Mariana Dionísio de. Tratamento jurídico das criptomoedas: a dinâmica dos bitcoins e o crime de lavagem de dinheiro. Revista Brasileira de Políticas Públicas, Brasília, v. 7, n. 3, p. 45-59, dez. 2017. Available at: https://www.publicacoesacadeicas.uniceub.br/RBPP/article/view/4897/3645.
[5] CARRAZA, Roque Antonio. Curso de direito constitucional tributário. 22ª ed. São Paulo: Malheiros, 2006.
Available at: https://exame.com/bussola/tributacao-de-criptomoedas-avanco-ou-violacao-da-legalidade/
Autor: Flávia Sant'Anna Benites • email: flavia@ernestoborges.com.br • Tel.: +55 67 99984 1406
