Colombians Will Have to Declare Operations Performed on Exchanges with Bitcoin

  • The Colombian tax regulator charged two Colombians for omitting commercial operations with Bitcoin.
  • The users were trading on the Finnish-registered LocalBitcoins exchange.

Peer-to-peer, or P2P, cryptocurrency operations in performed in Colombia through crypto exchanges will now have to be declared to the tax regulator, according to notifications sent by the agency to two LocalBitcoins users.

The Directorate of National Taxes and Customs of Colombia (DIAN), imposed a fine on the two users for trading with cryptocurrencies and not reporting it in their tax returns, local media DiarioBitcoin reported.

In the notifications sent to the two taxpayers, the tax agency alleged that both had incurred irregularities during their respective tax returns for the fiscal year of 2021.

Taxpayers residing in the Department of Santander were fined for committing "possible inaccuracies in the income and complementary tax declaration, taxable year 2019 for operations carried out with cryptocurrencies."

The regulator urged the two taxpayers to verify the inconsistencies and make the consequent corrections as established in article 644 of the National Tax Statute (ETN). They must also pay their respective fines, and send the fully updated information with the associated BTC operations to the tax agency.

On the Flipside

  • For the 2019 fiscal period, there was no regulation in the country related to the trading of cryptocurrencies.
  • The bill for the “Crypto Asset Exchange Services Offered Through Exchange Platforms” presented in Congress has not yet been discussed.

It is not clear whether the fine imposed on the two taxpayers was for carrying out operations on the LocalBitcoins platform themselves, or because the sanction is part of an investigation. What has been revealed so far is that the Finnish Tax Authority participated in the investigation, resulting in the notification “for control action” by the DIAN.

The notification from the Colombian regulator refers to operations carried out by the two taxpayers with bitcoins and their equivalent value in Colombian pesos.

It is also possible that the data of the two users was provided to DIAN by the exchange itself. The company, registered in Finland, is governed by the laws of that country, so it is possible that the Finnish regulator requested the information from DIAN, and then shared its investigation with the Colombian authorities.

LocalBitcoins requires users to provide their personal data in order to carry out operations with BTC in compliance with the KCY (Know Your Customer) policies of the platform. The application of this rule has caused a drop in the trading volumes of the exchange.

Why You Should Care

  • It is not know if the requirement to declare cryptocurrency operations in Colombia will be extended to the other crypto platforms operating in the country, such as StormGain, Coinex, LocalCryptos, Paxful, Buda, Panda Exchange and Binance.

Users of exchange platforms, especially Binance, have already had problems related to blocked accounts due to investigations carried out by the Colombian police in coordination with the authorities of the Netherlands and the United States Drug Enforcement Administration (DEA).


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    This article is for information purposes only and should not be considered trading or investment advice. Nothing herein shall be construed to be financial legal or tax advice. Trading Forex, cryptocurrencies, and CFDs poses a considerable risk of loss

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