In a recent legislative change, Argentine President Javier Milei, along with Economy Minister Luis Caputo, effectively canceled proposed tax exemptions for cryptocurrencies, altering a key component of the 'Bases and starting points for freedom of expression' bill. the Argentines'. This decision marks a significant departure from Argentina's previously more favorable stance towards bitcoin and digital assets.
Pro-bitcoin President Milei Eliminates Tax Breaks
As initially bitcoin-y-monedas-digitales” target=”_blank” rel=”noopener nofollow”>reported According to technology-focused Argentine outlet iProUP, the original draft of the bill included a clause for asset regularization, suggesting a flat tax on several types of undeclared assets, including cryptocurrencies.
The tax provisions of the bill planned to allow Argentine citizens to disclose ownership of previously undeclared assets, such as cryptocurrencies, with a 0% tax rate applied to the first $100,000 in value and a tax rate of up to 15% on the value of assets that exceed this limit.
However, this part of the bill was removed following a decision made on Friday by President Milei and Minister Caputo. Guillermo Francos, Minister of the Interior, explained that this is due to the delay it is causing in the legislative process.
Francos stated that “the fiscal part was minor and delayed the treatment of the initiative in Parliament.” He further emphasized that “the Base Law aims to generate freedom for economic development,” and that the elimination of the tax section was crucial to expedite this objective.
The removal of tax exemptions for cryptocurrencies has reignited discussions about the current tax regime applicable to digital assets in Argentina. Marcos Zocaro, accountant, clarified to iProUP, “The most important taxes that cover cryptocurrencies are Profits and Personal Property.” Zocaro further explained: “In the case of an individual, no tax is paid by simply purchasing 'digital currency'. What Profits are taxed on is the profit that is produced from the sale.”
crypto taxes in Argentina
Regarding the Personal Property Tax, Zócaro highlighted the current debate over whether bitcoin and cryptocurrencies are taxed or exempt, since the Personal Property Law does not specifically mention them. However, he confirmed that tax authorities have been considering cryptocurrencies as taxable since 2022.
Sebastián M. Domínguez, director of COSUDE Asesores Tributarios, highlighted the need for taxpayers with cryptocurrencies to declare them if their assets exceed the legally established amounts. He emphasized that “in the case of Personal Property, many accountants consider the market value, but the treatment they give is the acquisition cost.”
María Inés Brandt, from the Marval, O'Farrell & Marval law firm, described the taxation process for the sale of bitcoin and cryptocurrencies. Brandt explained: “Individuals residing in Argentina must pay income tax on income derived from the sale of cryptocurrencies at a rate of 15%.” She also added that in the case of companies, profits are taxed at a progressive rate of 25% to 35%, depending on the issue, plus 7% for possible distribution of dividends.
This policy change under the administration of President Milei, known for his libertarian economic approach, can be seen as a shift towards a more conservative stance on the regulation and taxation of digital assets. Samson Mow, bitcoin advisor to the president of El Salvador, revealed in November last year that he planned to meet with the “pro-bitcoin” president of Argentina, Milei, to discuss the integration of btc into Argentina's economic framework.
As Bitcoinist reported, Milei emerged victorious in the 2023 presidential election in Argentina. He previously described central banks as “a scam” and stated: “What bitcoin represents is the return of money to its original creator, the private sector.” However, since he became president in December 2023, he has maintained public silence on matters related to bitcoin.
At the time of this publication, btc was trading at $42,659.
Featured image created with DALL·E, chart from TradingView.com
