Argentina Taxes and Regulates Operation of Cryptocurrencies
*The government controls crypto activities for both individuals and businesses by Decree 796/2021.
*According to the government, the advantages of digital transfers would benefit both enterprises and users.
*VAT and income tax are the taxes that businesses and individuals will pay.
The Competitiveness Law, which instituted the check tax in 2001, was amended by Presidential decree 796/2021, which was published in the Official Gazette. President Alberto Fernández, Chief of Cabinet Juan Manzur, and Minister of Economy Martn Guzmán all signed the contract.
Argentina is one of the top ten nations in the world where cryptocurrency use is accelerating. According to official figures, there are at least 2 million active user accounts in the Argentine market.
The Federal Administration of Public Revenues (AFIP) refused to accept this information in order to tax digital money activities. More so at a time when the government wants to boost income in order to enhance public spending and appease voters.
"The exemptions provided for in this decree and other regulations of a similar nature will not apply in those cases in which the movements of funds are linked to the purchase, sale, exchange, intermediation, and/or any other operation on crypto assets, cryptocurrencies, digital currencies, or similar instruments, in the terms defined by the applicable regulations," according to the regulations.
On the other hand,
*Two days after losing parliamentary elections to the Argentine center-right, the administration authorized the tax.
When the government deems it essential, the Competitiveness Law gives the government extraordinary rights to provide entire or partial exemptions from the tax on bank credits and debits.
The government edict explains that owing to the epidemic, the Central Bank devised a new operational structure in order to expand electronic transactions, which justifies the approval of the crypto tax.
It also upgraded the National Payment System and introduced Transfers 3.0, which is used to make payments using transfers via standardized QR codes, via Communication A 7153.
Immediate transfers will help both companies and consumers since they are more accessible for users and allow for the construction of a more efficient and secure payment system.
Individual and corporate taxes
VAT must be paid by natural persons who get a commission for the acquisition or sale of cryptocurrencies (21 percent ). They will also have to pay a profit tax on the difference between the buy and selling price (Income Tax).
If the procedure takes place in Argentina, the income will be classified as coming from the nation. Otherwise, it will be classified as income from a foreign source. Similarly, the AFIP distinguishes between cryptocurrencies that are developed (mined) in the nation and those that are extracted elsewhere.
The government considers cryptocurrency to be an asset or a personal good, according to the order. As a result, when they add other assets to their non-taxable minimum, they must pay a tax.
Exchange platforms will be subject to two additional levies. The Income Tax, which is generated from the commissions they charge for managing their customers' operations, and the Value Added Tax, which is derived from the commissions they charge for managing their clients' operations.
Why Should You Be Concerned?
*It is predicted that the regularization of bitcoin activities in Argentina would provide a new push to the South American country's cryptocurrency economy.
In Argentina, cryptocurrency has helped investors and other users cope with the lack of dollars and protect themselves from inflation.