IN 1888/2019

Key points

• IN 1888/2019 is a Federal Revenue (Receita Federal) rule that established the obligation to report crypto asset transactions to tax authorities.
• It is a reporting obligation that exists regardless of whether there is tax owed.
• The rules on who must report and from what values are defined by the regulation and can change over time.

What is IN 1888/2019?

IN 1888/2019 is a normative instruction from Brazil's Federal Revenue Service that created the duty to provide information about transactions carried out with crypto assets. It was an important milestone because it specifically established that certain crypto movements need to be reported to the Brazilian tax authority. It is an ancillary obligation, that is, a duty to inform, distinct from the duty to pay tax, even though the two topics are related.

How it works

The rule defined who is subject to the reporting obligation and in which situations it applies, generally considering the type of transaction and value brackets. The central idea is to give the tax authority visibility over crypto asset movements, including transactions carried out outside intermediaries established in the country. Thus, both certain platforms and individuals who operate on their own account may have reporting duties, according to the established criteria.

An essential point is that the reporting obligation is independent of tax assessment. Even if a transaction does not generate tax owed, for example because it falls within a capital gain exemption bracket, it may still need to be reported if it meets the rule's criteria. Confusing the two duties is a common mistake: reporting is one duty, calculating and paying any tax is another, and both must be observed when applicable.

Like any tax rule, its concrete parameters, such as the values from which reporting is required, deadlines, and the format of the information, are defined by regulation and can change over time. In fact, later rules have been updating and complementing the reporting rules for crypto asset transactions, in a move toward alignment with international standards. For this reason, the rules currently in force should always be checked with the Federal Revenue Service, and each person's situation may vary.

Understanding IN 1888/2019 helps clarify that operating with crypto in Brazil can involve duties to report to the tax authority, in addition to any applicable taxes.

Why it matters

Understanding IN 1888/2019 helps clarify that there are obligations to report crypto transactions to the tax authority, regardless of whether there is tax owed. Knowing this helps avoid penalties for omission. This is an educational explanation and does not constitute any tax, accounting, or legal guidance.

Risks and limitations

The concrete reporting parameters, such as values, deadlines, and format, are defined by regulation that changes over time, and later rules have been updating these rules. Each person's situation varies. This text is educational and does not constitute tax, accounting, or legal guidance; always consult the Federal Revenue Service and a professional.