The Brazilian government has confirmed that it will be treating bitcoin as a security and prompt investors to file it on their tax forms as capital gains. Therefore, Brazil would not be classifying bitcoin as a legitimate currency, according to Claudemir Malaquias, the Chief of Tax and Customs at the Brazilian Revenue Service, in an interview with Folha de Sao Paulo.
Brazil’s taxing will be applied to digital currency holdings of approximately $450. Any citizen who owns more than 35,000 Brazilean real ($15,770) in bitcoin would be required to pay 15 percent of that to the government. Every gains and loss will be filed annually with tax returns.
Malaquias did concede that Brazilians could very well evade paying their taxes on bitcoins because it’s very difficult to track transactions. However, if it garners more popularity then it could prompt the Brazilian Central Bank to intervene.
This latest announcement from the South American country comes soon after the Internal Revenue Service (IRS) stated that it would not view bitcoin as a currency and instead treat it as capital gains taxable. This created a mixed reaction in the bitcoin community.
“For federal tax purposes, virtual currency is treated as property,” the IRS said in a statement. “General tax principles applicable to property transactions apply to transactions using virtual currency. Under currently applicable law, virtual currency is not treated as currency that could generate foreign currency gain or loss for U.S. federal tax purposes.”
Numerous governments and central banks have classified the virtual currency as a commodity and not a legitimate currency.
