In Argentina, a provincial parliament voted for a bill that would impose new taxes on gross receipts from cryptocurrency transactions. The central province of Cordoba is now the first in the country to tax cryptocurrencies, including crypto-currency platforms and retailers.
Approved tax law defines cryptocurrencies
According to CBA4N, the 2021 tax bill approved by the legislature provides that individuals will be taxed between 4% and 6.5% of gross income from crypto transactions. A 0.25% rate will also apply to individuals or entities receiving payments in cryptocurrencies in exchange for goods or services.
Citing Cordoba Bitcoin, the local crypto community, local media believe that other provinces and even the national government could replicate the measure.
Cordova Bitcoin also clarified to CBA4N that previously there was only a 15% tax that matched the revenue and covered the crypto due to the price differential in the year. The Central Bank of the Republic of Argentina has required local exchanges to report all transactions involving cryptocurrencies.
What is new in this case is that the approved bill now provides a clear definition of cryptocurrencies:
A digital representation of value that can be traded digitally and whose functions are intended to represent – directly and/or indirectly – a medium of exchange and/or a unit of account and/or a store of value.
The new rules could deter investors in the sector, warns an expert.
The law mentioned by the crypto community in Córdoba is the Income Tax Law, which was amended in 2017 to include crypto assets. Marcos Zocaro, a local tax consultant, explained to La Nacion the drawbacks such a law could have on the local economy:
Increasing the tax burden could be dangerous, as it would not only discourage investment in the sector, but also ensure that many cryptocurrency transactions remain in the informal sector.
He also pointed out the ambiguity of definitions of terms like bitcoin or stablecoins in the tax code:
They [crypto] are put in the same state of taxation as bitcoin, stables and security tokens. Is bitcoin (which has no underlying asset) the same as a stable dollar? Apparently not.
What do you think about the passage of this bill in Cordoba, Argentina? Let us know your comments in the section below.
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