What taxes apply to cryptocurrencies in Argentina

In the Argentina there is still no clear tax framework for operations with cryptocurrencys. There are dVarious regulations, opinions and resolutionsboth nationally and provincially, which reaches the industry and its users.

“In Argentina, no invoice is issued before the sale of bitcoinfor example, because General Resolution 1415 of the Federal Administration of Public Revenues (AFIP) does not contemplate it”, explains Marcos Zocaro, tax consultant and author of the book: Cryptocurrency Handbook.

Personal Assets, Income Tax and the most recent law that taxes cryptocurrency mining in the province of Buenos Aires, make up the three regulations that digital users must take into account when making affidavits and complying with their tax obligations. However, andThese regulations present gray in their definitions and quotes.

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Cryptocurrencies and Personal Assets

“Although there is no explicit reference to cryptoactives in the law or its regulations, the AFIP opinion 2/22, which is a non-binding interpretation that the tax authorities execute on the law, andestablishes that cryptocurrencies are a financial asset and, therefore, are encumbered by Personal Assets. Now, not all assets are reached, so we have to take into account what type of cryptoactive we are dealing with to find out what their tax treatment is,” said Zocaro.

“Personal Assets taxes certain assets that people have. There are some that are exempt. If a natural person owns encumbered assets above a minimuma little more than 11 million pesos by 2022, you must register, present an affidavit and pay what corresponds,” added the expert.

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“Assets are taxed differently, at current value or at the cost of your purchase, and the type of rate varies according to where they are, whether in the country or abroad, the latter being the ones that pay the most. Regarding crypto, it is necessary to take into account, to know if it is an encumbered asset or notthe type of cryptoactive that we own, since not all of them have the same nature,” he explained.

“These can be payment tokens, such as bitcoin for example, utility tokens or value tokens, such as the tokenization of a company’s shares. In the latter case, since it is the digital representation of our participation in a company, is reached by Personal Property. It is worth noting that the opinion does not distinguish between crypto assets and cryptocurrencies, nor does it make clear the way of valuation,” Zocaro exemplified.

Cryptocurrencies and income tax

“Regarding this tax, all profits obtained from the sale of cryptocurrencies are reached. Although the norm speaks of digital currencies, and understands them as payment tokens, the consideration regarding the source of the profit is not clear, whether it is local or foreign, which modifies the way of settling the tax,” he warned.

“Since 2018, the law determined that the source is Argentina if the issuer is in the country, but this is not applicable to the case of Bitcoin, what is decentralizeddoes not have a specific origin. Taking article 5 of the law, we can consider that if the fact, in this case the sale, is national, the source of profit is Argentina,” he added.

The new tax on cryptocurrency mining in Buenos Aires

“This law qualifies cryptocurrency mining under the AFIP data processing code and states that Gross income reaches this type of activity as long as the hardware is in the province of Buenos Aires,” Zocaro asserted.

“The norm, which began to be applied in Januaryhas some weak points, such as ignorance of the different types of protocols, which does not allow full application of the law in all mining processes. Nor does it leave established on what prices the rate is applied, which is four percent. Taking into account that the prices vary in the different exchangesit is not clear which one should be taken as a reference,” he said.

What does the BCRA think of cryptocurrencies?

Miguel Angel Pescepresident of the Banco Centralemphasized the need to “isolate” the effects of crypto assets from the traditional financial system, when discussing what policies to apply to these assets and warned of the risks they entail.

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“Crypto assets are decentralized and anonymous in nature and it is not possible to know where crypto asset holdings are held, and most of them do not have an underlying asset,” Pesce said during the meeting of Ministers and Finance and Governors of Central Banks of the G20, in India and quoted by Forbes.

“We should treat them as akin to gambling, and in that sense, our goal should be to isolate its effects from the traditional financial systemPesce said, offering an overview of where the monetary policy authority is heading.

And I add: “We must focus on addressing data gaps for guarantee effective monitoring.

SE

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