- Through Decree 796/2021, the government regulates crypto operations of both people and companies.
- The government claims that businesses and users will benefit from the advantages offered by digital transfers.
- The taxes that companies and individuals will pay are VAT and income tax.
The Argentine government imposed a levy on all cryptocurrency operations, it disclosed on Wednesday. The directive for digital money was included by decree in the tax on bank credits and debits, better known as the check tax.
Presidential decree 796/2021, published in the Official Gazette, introduced changes to the Competitiveness Law, which created the check tax in 2001. The document was signed by President Alberto Fernández, the Chief of Cabinet, Juan Manzur, and the Minister of Economy, Martín Guzmán.
Argentina is one of the 10 countries globally where the use of cryptocurrencies has been adopted the fastest. Official data indicate that the Argentine market has at least 2 million open user accounts.
The Federal Administration of Public Revenues (AFIP) didn’t let this data go unnoticed and decided to incorporate digital money operations into its tax source, especially at this time when the government needs to increase its revenues to raise public spending and satisfy voters.
The regulation says: “the exemptions provided for in this decree and in other regulations of a similar nature will not be applicable 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.”
On The Flipside
- The tax was approved by the government two days after losing the legislative elections against the Argentine center-right.
The Competitiveness Law grants special powers to the government to establish total or partial exemptions to the tax on bank credits and debits when it deems it necessary.
To justify the approval of the crypto tax, the government decree indicates that due to the pandemic, the Central Bank established a new operating framework in order to extend electronic transfers.
Likewise, through Communication A 7153, it updated the National Payment System and established the so-called Transfers 3.0, which is used to make payments with transfers through standardized QR codes.
Both businesses and users will be able to benefit from the advantages offered by immediate transfers, which are not only more accessible for users, but also allow the creation of a more efficient and secure payment system.
Taxes for individuals and companies
People who obtain a commission for the purchase or sale of cryptocurrencies must pay VAT (21%). They will also pay a tax on profits related to the difference between purchase and sale (Income Tax).
If the operation is carried out in the country, the tax body will consider the income as from an Argentine source. Otherwise, it will be categorized as foreign source income. In the same way, the AFIP establishes a difference between the cryptocurrencies generated (mined) in the country and those that are extracted abroad.
According to the decree, the government considers cryptocurrencies to be an asset or a personal good. Therefore, they must pay a tax when added to other assets, when they exceed the non-taxable minimum.
Exchange platforms will also have to pay two taxes. The VAT for service provision, and the Income Tax, which is derived from the commissions they charge for managing their clients’ operations.
Why You Should Care?
- It is expected that the regularization of cryptocurrency operations in Argentina will translate into a new boost for this market in the South American country.
- Cryptocurrencies in Argentina have helped investors to protect themselves from inflation.