The enactment of the Foreign Exchange and International Capital Law (Law No. 14,286/2021), ratified in December 2021 and in effect since the past December 31, has ushered in a novel provision allowing private individuals to engage in the buying and selling of foreign currencies. This authorization, however, imposes a constraint on the seller, limiting them to transactions of up to US$500, or its equivalent in another currency, with each buyer.
While this practice was formerly confined to licensed stockbrokers or financial institutions endorsed by the Central Bank of Brazil (BC), the landscape has now changed. According to Ana Cláudia Utumi, a tax attorney and partner at Utumi Advogados, the rationale behind this regulatory amendment is rooted in recognizing that these exchanges occur "occasionally and in a non-professional capacity."
The specialist elucidates that previously, purchasing or vending foreign currency from unauthorized entities or establishments amounted to the offense of currency evasion under Article 22 of Law No. 7,492, inviting penalties including imprisonment ranging from two to six years, alongside fines.
As of today, if an individual transacts amounts exceeding the US$500 limit per deal between private parties, they could still be liable for this offense, as highlighted by Ana Cláudia.
The question of how to lawfully engage in the purchase and sale of others' foreign currency arises. Ana Cláudia emphasizes that for these operations to remain within the legal ambit, aside from adhering to the US$500 cap, all parties involved must report their transactions to the Federal Revenue.
In the case of sellers, the declaration can be accomplished through the Capital Gains Program (Gcap), accessible on the official Federal Government website. The process, in the lawyer's explanation, is straightforward: fill out the relevant fields with the purchase value of the foreign currency during acquisition, the resale amount, and the quantity sold. The program will then determine if any income tax should be levied on the transaction and the corresponding amount.
Gcap further generates the Federal Revenue Collection Document (Darf) if required, and individuals can export this data for their annual Income Tax declaration in the subsequent year.
For buyers of foreign currency, a declaration is only necessary if the funds remain unused beyond December 31 of the purchase year. In such cases, taxpayers are required to list the value of the currencies they possess in the assets and rights section of their Federal Revenue Service report.