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Ola pessoal!
The era of taxation loopholes and gray areas appears to be rapidly coming to an end in Brazil.
Thiago Barbosa, partner at Salles Nogueira Advogados and a crypto tax law expert, joins the show to discuss sweeping regulatory changes that will transform how Brazilian crypto holders must report and pay taxes on their digital assets.
Brazil is undergoing a major compliance transformation on two fronts. First, the new DeCripto regime replaces the old Normative Instruction 1888 reporting requirements, aligning Brazil with the OECD’s Crypto Asset Reporting Framework (CARF).
This isn’t just a bureaucratic update - it’s Brazil joining a global information-sharing network that enables tax authorities to exchange crypto holder data across borders. In other words, if you’re a Brazilian trading on a foreign exchange, that platform will be reporting your activity back to the Receita Federal.
Perhaps the most contentious development is the Finance Ministry’s stance on applying IOF (tax on financial operations) to stablecoin transactions. Here’s the issue: IOF was created before stablecoins existed, and the current law only covers currency issued by governments - not digital representations of fiat issued by private companies like USDT or USDC. This creates a legal loophole that technically exempts stablecoins from IOF.
However, the government is engaged in what Thiago calls “rhetoric warfare.” By publicly stating that IOF will apply to stablecoins, they’re using fear to discourage companies from adopting them, even though they lack the legal authority to collect the tax without Congressional action.
When companies avoid stablecoins out of uncertainty, they stick to traditional fiat channels where the government collects more fees. It’s regulatory intimidation without legislative backing, and Thiago warns that the Receita may attempt to unilaterally collect IOF on stablecoin transactions anyway, forcing companies into costly legal battles to defend themselves.
Key Takeaways:
Global reporting is here: Foreign exchanges must now report Brazilian user data to the Receita Federal under the OECD framework, creating an international surveillance net
Three reporting obligations: Exchanges in Brazil, foreign platforms serving Brazilian users, and individual crypto holders all face new disclosure requirements
VASP licensing gets serious: The Central Bank’s new requirements demand significant capital, compliance infrastructure, and regulatory approval to operate
IOF stablecoin limbo: The government claims IOF applies to stablecoins despite legal gaps, using fear tactics to discourage adoption while avoiding legislative process
Lifestyle monitoring intensifies: The Receita Federal is investing heavily in AI and surveillance tools to identify mismatches between reported income and actual spending patterns
The Bigger Picture: Financial Surveillance Escalates
Perhaps most concerning is what Thiago revealed toward the end of our conversation: this crypto crackdown is part of a much broader financial surveillance push by the Brazilian government. The IRS is pouring resources into tracking everything from Instagram posts showcasing luxury lifestyles to international travel patterns—all to identify taxpayers whose spending doesn’t match their declared income.
As Thiago bluntly put it, the window for undeclared crypto wealth is closing fast. With international data sharing, AI-powered surveillance, and increasingly sophisticated enforcement mechanisms, the “degens” who thought they could stay one step ahead of the Receita Federal are running out of room to maneuver.
The message is clear: Brazil is serious about bringing crypto into the regulated fold, and non-compliance is becoming an increasingly risky bet.
You can connect with Thiago on Linkedin and Instagram
Have a great week everyone,
-AWS
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