• The government controls crypto operations for both companies and natural persons through Decree 796/2021.
• Digital transfers are claimed to be beneficial for users as well as businesses.
• Companies and individuals must pay VAT and income taxes.

It announced Wednesday that the Argentine government had imposed a levy for all cryptocurrency transactions. Digital money directive was added to the Tax on Bank Credits and Debits (also known as the Check Tax).

The Official Gazette published Presidential Decree 796/2021. It made modifications to the Competitiveness Law which established the check tax in 2001. The document was signed by President Alberto Fernández, the Chief of Cabinet, Juan Manzur, and the Minister of Economy, Martín Guzmán.

Argentina is among the 10 countries where cryptocurrency adoption has taken place the fastest. According to official data, there are at least 2,000,000 user accounts in Argentina.

Federal Administration of Public Revenues, (AFIP), did not allow this data to pass in order to add digital money operations as a tax source. There are times when the government must increase its revenues in order to satisfy voters and raise public spending.

The regulations establish that “the exemptions provided for in this decree and in other regulations of a similar nature will not be applicable in those cases in which the movements of funds are linked to the purchase, sale, exchange, intermediation and / or any other operation on crypto assets, cryptocurrencies, digital currencies, or similar instruments, in the terms defined by the applicable regulations”.

To The Flipside

• Two days after the defeat of the Argentine center right in legislative elections, the tax was passed by the government.

The Competitiveness Law confers special powers on the government that allows it to grant partial or total exemptions from the bank credit and debit tax when necessary.

The government decree explains that the Central Bank created a new operational framework to allow electronic transfers to be extended to cover the pandemic. This justifies the adoption of the crypto tax.

Communication A 7153 also updated the National Payment System. It established Transfers 3.0. This is used for payments that use standard QR codes to transfer funds.

Businesses and customers will benefit equally from instant transfers. These are easier to access for both users and the business.

Individual and corporate taxes

Natural persons who obtain a commission for the purchase – sale of cryptocurrencies must pay VAT (21%). A tax will be charged on the profits from both purchase and sale.

The tax authority will treat the income from Argentina as if it is performed in the country. If it is not, the income will be classified as foreign source income. Similar to the AFIP, it establishes a distinction between cryptocurrency generated in the country (mined) and those extracted overseas.

The decree states that cryptocurrencies are considered assets or personal goods by the government. When they have assets that exceed the minimum non-taxable threshold, they will be subject to tax.

The two taxes that exchange platforms must pay are also the VAT for service provision and Income Tax. The VAT for service provision, and the Income Tax, which is derived from the commissions they charge for managing their clients’ operations.

Why you should care

• This market will see a significant boost from the legalization of cryptocurrency operations by Argentina.
• Investors and users of cryptocurrencies have been able to use argentine cryptocurrency for protection against inflation and face dollar shortages.

EMAIL NEWSLETTER

You can also join the crypto-verse

Upgrade your inbox and get our DailyCoin editors’ picks 1x a week delivered straight to your inbox.

[contact-form-7]
With just one click, you can unsubscribe at any time.

Continue reading on DailyCoin