Towards the end of March, Rio de Janeiro Mayor Eduardo Paes announced that taxes related to urban real estate within their city limits, otherwise known as Imposto sobre a propriedade predial e territorial urbana [IPTU] can be paid using crypto from 2023.
New decree related to Crypto taxes passed
In the latest development, the Brazilian city has reportedly “authorized the accreditation of companies” that will use crypto to carry out IPTU 2023 payment operations. Chalking out the latest order passed, a local media report highlighted,
The decree published today [11 October] in the Official Gazette of the Municipality, indicates that the city hall will hire companies specialized in carrying out the conversion of crypto assets into reais. With the measure, the municipality will receive 100% of the value in local currency, at no additional cost to the capital.
Notably, for Rio Mayor Eduardo Paes, the said initiative puts the city at the forefront of the crypto market by fostering the circulation of these coins in the economy. He was quoted saying,
“Rio de Janeiro is a global city. Therefore, we are following the technological and economic advances in the universe of digital financial assets. We have a look to the future and we want to help it become the country’s capital of innovation and technology. And we’re already ahead. We are the first city in Brazil to offer this type of payment to the taxpayer.”
The latest order passed also outlined that companies interested in offering the crypto payment option to their customers must be accredited with the municipality. They should have a CNPJ [an identification number of Brazilian companies]. Customer registrations are updated similarly to the determinations of the Central Bank of Brazil to financial institutions and have a service provision contract with one of the city’s collection banks.
To analyze the use of cryptos, the city will keep track of the information on the pace of payments via a daily report. The Secretary of Finance and Planning—Andrea Senko—revealed that the use of crypto as a form of payment will only be for IPTU initially, but the intention was to extend it to other taxes. She said,
“We want to assess how the city will behave with this new payment method so that we can include it in other taxes in the future.”
It is interesting to recall that during the initial announcement in March, Binance CEO Changpeng Zhao revealed the company’s plan to open a new office in the region. Back then, he stated that the Mayor had “done his part” while Binance was “working” on their end.
At the beginning of October, the largest crypto exchange officially launched two offices in Brazil aiming to expand its presence in the South American country. One of them was, notably, in Rio.