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Cryptocurrencies: what taxes are paid for buying, selling or saving in virtual currency

2021-07-30T09:42:29.084Z


Is it better to have them in one country than another? Is it convenient to charge a job in crypto? A guide to what taxes digital assets must pay.


Silvana Saldisuri

07/30/2021 6:00 AM

  • Clarín.com

  • Services

Updated 07/30/2021 6:00 AM

For some time, a growing number of companies began to accept virtual currencies as payment, approaching an asset class rejected until a few years ago by the main financial institutions.

The 

crypto market

 had been encouraged by the statements of billionaires Elon Musk (Tesla) and Jack Dorsey (Twitter) who gave strong support to the sector.

As a result, cryptocurrencies began to leave the exclusive orbit of experts, but the more they become popular, the more

questions about their use become

. The tax issue is one of them and reaches those who undertake the path of 

buying digital currencies

, either for

investment

purposes

or as a form of payment and collection of goods and services, among other uses.

Do cryptocurrencies pay

taxes

?

What type?

For tax purposes, is it better to have them in one country than another?

Do you pay more when buying or selling?

What if I treasure them?

Do cryptocurrencies facilitate

evasion

?

Is it convenient to charge a job in cryptocurrency in terms of its tax consequences?

These are some of the questions that still persist among those inexperienced on the subject. 

The tax issue is an uncertainty for those who undertake the path of buying digital currencies.

Photo: Reuters.

"These questions are of interest in relation to the crypto world as it is an

innovative phenomenon whose gray areas

come from what is, perhaps, its greatest virtue: decentralized control through block chains or blockchain."

"This momentarily leaves them outside the scope of regulation of

central banks

and

financial institutions

and poses challenges for governments when it comes to exercising fiscal control," said the founding attorney and CEO of @UntitledLegal, a specialized legal services company. in investment funds,

Martín Litwak

.

Meanwhile, he stressed that the answers to these questions will serve only as a guide because "we are still in an

extremely green area

in relation to what we know of the phenomenon, which determines that any

official regulation

on the basis of which it can be started to tax them nowadays it will always be very partial since we are facing a phenomenon that has not yet deployed its full potential ”.

What taxes do cryptocurrencies pay in Argentina?

In the country, cryptocurrencies, like any other good, are included in the calculation of the Personal Property Tax.

Regarding the "Income Tax", as of the enactment of Law 24,430 (2017), crypto was expressly included within the chapter corresponding to capital gains and

taxed 15% on the result of the sale

.

The calculation is made on "hard currency, not in Argentine pesos, so that the exchange difference is not part of the taxable profit," explained Litwak. In addition, the Province of Córdoba has taxed cryptocurrencies and cryptocurrencies with Gross Income (IIBB). it is believed that the trend will be for the other provinces to implement it in the long term.

In Argentina, crypto is included in the calculation of the Personal Property and Income Tax.

Photo: Shutterstock.

What happens when payment is received for a job with crypto?

As in a good part of the countries of the world,

in Argentina

cryptocurrencies

are not considered as currencies

, therefore, when one charges in crypto it is not considered, technically, a monetary payment but a

'payment dation'

, or payment in kind, which basically means canceling an invoice with anything other than a coin.

So,

whoever charges in crypto will have to pay for what they billed for the work they did

, in the same way as if they had been paid with, for example, a car. 

In the case of provinces that charge IIBB to cryptocurrencies, the use of this tool could bring greater complications, or at least additional costs.

What happens when a job is charged from abroad?

When a payment is received from abroad it is exactly the same as when they pay in Argentina.

In our country the principle of global income governs, which assumes that

the person must pay taxes in the country where they establish their tax residence,

no matter where they have the asset or where they have earned what they have earned.

The problem with Argentina, in particular, is when you have to enter the money,

since the country has regulations on the export of services that

require you to settle dollars in the official market

, which represents an exchange loss with respect to what, in It is actually worth the dollar in the local market.

That is a very particular circumstance of the country;

in Uruguay, for one example, this is not the case.

In Argentina, whoever charges in crypto will have to pay for what the work billed.

Photo: Shutterstock.

What happens in Uruguay with crypto payments from abroad?

In

Uruguay

, a country that so many Argentines look to or move to for tax reasons, on the one hand, cryptos 

are exempt from Wealth Tax, as they are assets abroad

.

In that country,

unlike Argentina

, a principle of taxation of the “territorial” type governs, albeit partially, as occurs in almost all Central American countries, and also partially in

Paraguay and Bolivia

, where they are paid Taxed only on what is earned in the country and nothing that is had or received abroad is taxed.

Regarding personal income tax (personal income

tax

), they

are exempt

because,

being active abroad

, they would only pay taxes in the case of paying coupons or dividends and not for capital increases.

Since the profits they generate are due to capital appreciation (improvement), there is no tax.

What about crypto in the United States?

Although there is no law that expressly says so, the

United States

is assimilating, in fact, to

consider crypto

, in terms of its tax treatment, as a financial asset, which means that

the American treasury does not charge to buy them, nor for having them in the wallet

.

When the crypto is sold, it is considered to generate a capital gain, "capital gain", and not an "income tax" (income tax), which has a higher charge.

Today the

most developed countries

are following the American model, that is, they

do not tax the purchase, nor the possession, only the sale

and at capital gain rates, such as financial income.

In Uruguay they are exempt from the Wealth Tax, as they are assets abroad.

Photo / Reuters

Crypto in the rest of the world

The responses of the countries have been diverse;

from banning them, to seeing them as an opportunity to attract investment and even, more recently, adopting them as legal tender.

There are countries that have even launched their own cryptocurrencies

and even accept them for the payment and refund of taxes, fees and other services.

Such is the case of

Bermuda

, which uses

StableCoins

(USDC), a

currency linked to the value of the dollar

, which has received support and investments from companies dedicated to cryptography or - going to the other end of the ideological spectrum - the Petro, the currency oil-backed Venezuela digital.

Some governments

have

encouraged the use

of these currencies through

tax exemptions to attract investment

, in addition to other tax incentives for non-residents. Such is the case of Portugal, which does not tax natural persons (yes, legal entities) who sell cryptocurrencies nor will it consider it a capital gain, or income from investments that are normally taxed at 28%.

A novel case is that of

El Salvador

, which became the

first country in the world to establish a particular crypto as

mandatory

legal tender

, which means, among other things, that it

forces its citizens to receive crypto as payment

, which allows us to convert it into dollars without paying taxes for it and even paying taxes in that currency.

Other

“crypto friendly” countries

, in addition to those already mentioned, such as Bermuda or Portugal, are the following:

Andorra, Switzerland, Germany, Singapore, Belarus, Malaysia, Georgia, Slovenia, Malta, Japan and South Korea

.

These are States that have understood that this new technology has certain advantages and have created a favorable environment for its development.

LN

Look also

Cryptocurrencies: 7 short and online courses for beginners

Earnings: how often it is convenient to present deductions to be able to beat inflation and pay less

Source: clarin

All news articles on 2021-07-30

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