Citizens in Argentina may be required to pay crypto taxes.
In Argentina, two provinces have already enacted crypto tax regulations, ushering in a new crypto tax paradigm. This implies that Argentinians must declare their bitcoin holdings and pay taxes on transactions made in the provinces of Tucuman and Cordoba. This is because cryptocurrencies have been lumped in with all other foreign currencies and are so taxed.
Cryptocurrency tariffs are now in effect in Argentina, at least in some areas. Users who trade and store cryptocurrencies are now required to reveal their gains and pay taxes in at least two provinces: Cordoba and Tucuman. The reason for this is a new provincial rule stating that cryptocurrencies would be taxed like other foreign currencies when exchanged.
This implies that cryptocurrencies are effectively considered like other foreign currencies in these two provinces under legislation. Tucuman recently passed an amendment to Article 223 of the legislation, which states:
Purchase and sale of foreign currency and government securities. The operations of the purchase and sale of digital currencies are included in this subsection.
Cordoba, another province that passed a similar resolution earlier this year, has likewise ruled that cryptocurrency exchanges would be taxed, but it extends this tax provision to persons or businesses who receive payments in cryptocurrencies for their goods or services.
The inclusion of cryptocurrencies within the scope of these laws is being explored in a number of nations throughout the world, owing to the increasing popularity of these instruments as an asset class and as a payment mechanism. Governments are beginning to see that by not regulating these payments, they are foregoing a significant source of revenue.
In reality, the Mexican government has proposed taxing such transactions at a rate of 20%. Cryptocurrencies gained traction in Argentina after the government imposed a monthly cap on the amount of dollars any individual could purchase. This was the tipping moment for a country not renowned for its cryptocurrency engagement to get interested in these new crypto tools that offered a savings option in the midst of the aforementioned predicament.
But it’s not just bitcoin payments that are thriving in Argentina. Because of its low energy costs, the country has become an appealing option for bitcoin mining businesses such as Bitfarms, which is already constructing a Bitcoin mega-mining farm to take advantage of the area’s low energy costs.