One of the most frequently asked questions I get is whether Binance is reporting to the IRS via IN 1888. Second, I am asked by many people if Binance has shared December 31, 2022 balances with the IRS for reporting purposes. pre-populated.
Binance is one of the largest cryptocurrency exchanges in the world and its activities have generated discussions about the regulation of crypto assets in several countries.
In Brazil, the regulation of cryptocurrencies has been the subject of debates and government initiatives. An example of this is the Legal Framework for Cryptocurrencies, approved in December 2022, which is awaiting a Decree to come into force. According to the legal framework, companies operating with cryptocurrencies in the country must register with a body to be defined by Decree, which is presumed to be the Central Bank (Bacen).
Recently, on October 3, 2022, Binance announced the opening of two offices in Brazil, one in Rio de Janeiro and the other in São Paulo. However, some articles and videos state that the brokerage already has its headquarters in Brazil and, therefore, would be subject to the mandatory IN1888/2019. Therefore, we did a search in the Federal Revenue database and found the following CNPJs:
There is no consensus on the mandatory IN 1888/2019 for Binance in Brazil. While the company does not recognize the requirement of the rule, it is understood that it is still mandatory to inform Binance as a foreign company in its declarations. There has not yet been (as far as we know) an official report by the company, which generates reflections and doubts about its performance in the country.
Does Binance Report or Not?
It is not possible to say whether Binance is operating irregularly in Brazil, as it is up to the authorities to define this issue. The company reiterates, in an automatic response, that “each citizen has the responsibility to repay their taxes in accordance with the determinations of the Brazilian tax authorities and that it does not offer tax or financial consulting services”.
With mandatory cryptocurrency exchange authorization in Brazil, it is likely that Binance will have to register in the country to continue operating. However, there is no confirmed information about this process, it is likely to take place by the end of the year, and then, yes, next year we would indeed have Binance informing the balances.
Given this scenario, the guidance is for users to inform Binance as a foreign company in their statements until there is more accurate and official information about its operations in Brazil.
So answering the two questions: no, Binance is not reporting, and therefore, the balance is not coming with it, in the pre-filled statement.
Could we add something? I don’t, Binance on the other hand would help a lot in providing a clear answer.
I would just add that, having all this history and number of CNPJs, my technical opinion is that Binance would not pass compliance itself.
See below the Binance CNPJs found in Brazil:
About the author
Text written by Ana Paula Rabello and originally published on the blog Declarando Bitcoin. Rabello is an Accountant, Judicial Expert and Income Tax Specialist.
