Cryptocurrencies, mining, non-fungible tokens. What taxes are imposed on cryptocurrencies in Argentina? Cointelegraph en Español consulted Marcos Zocaro for some clear answers. It should be noted that, although in Argentina there is still no clear tax framework for the various operations with cryptocurrencies, there are different regulations, opinions and resolutions, which affect the industry and its users.
Marcos Zocaro is a tax consultant and author of the book “Cryptocurrency Manual”, and explained, among other things, that “in Argentina an invoice is not issued for the sale of bitcoin, for example, because General Resolution 1415 of the Federal Revenue Administration Públicos (AFIP) does not contemplate it”.
Personal Assets, Income Tax and the most recent law that taxes cryptocurrency mining in the province of Buenos Aires, are currently some of the regulations that users of digital currencies must pay attention to when making their affidavits and meet your tax obligations.
Pedro Q. Justicia (PQJ): How is the tax news for cryptocurrencies in Argentina?
Marcos Zocaro (MZ): In our country there are different laws to which you must pay attention to know the tax scope on the crypto economy. First, the Personal Property Tax. Although there is no explicit reference to crypto assets in the law or its regulations, AFIP opinion 2/22, which is a non-binding interpretation of the law by the tax authorities, establishes that cryptocurrencies are a financial asset and therefore therefore they are encumbered by Personal Assets. However, not all assets are affected, so we have to take into account what type of crypto asset we are dealing with in order to know what its tax treatment is.
PQJ: What types of crypto assets are covered and which are not?
MZ: To answer this, let me make a few clarifications about the law. Personal Assets taxes certain assets that people have. There are some who are exempt. If a natural person has encumbered assets above a minimum – a little more than 11 million pesos by 2022 – they must register, present an affidavit and pay what corresponds. Assets are taxed differently, at the current value or at the cost of their purchase, and the type of rate varies according to where they are, whether in the country or abroad, the latter being the ones that pay more. With respect to crypto, it is necessary to take into account, to know if it is a taxed asset or not, the type of crypto asset that we have, since not all of them have the same nature. These can be payment tokens, like Bitcoin for example, utility tokens, or security tokens, like the tokenization of a company’s shares. In the latter case, since it is the digital representation of our participation in a company, it is covered by Personal Assets. It is worth noting that the opinion does not distinguish between crypto assets and cryptocurrencies and does not make the valuation method clear.
PQJ: Should cryptocurrencies be included in the Income Tax?
MZ: With regard to this tax, all the profits obtained from the sale of cryptocurrencies are reached. Although the standard speaks of digital currencies, and understands them as payment tokens, the consideration regarding the source of the profit is not clear, whether it is local or foreign, which modifies the way of settling the tax. Since 2018, the law determined that the source is Argentina if the issuer is in the country, but this is not applicable to the case of Bitcoin, which is decentralized, does not have a specific origin. Taking article 5 of the law, we can consider that if the fact, in this case the sale, is national, the source of profit is Argentina.
PQJ: How does the new tax on cryptocurrency mining work in Buenos Aires?
MZ: This law qualifies cryptocurrency mining under the AFIP data processing code and establishes that Gross Income reaches this type of activity as long as the hardware is located in the province of Buenos Aires. The rule, which began to be applied in January, has some weaknesses, such as the lack of knowledge of the different types of protocols, which does not allow full application of the law in all mining processes. Nor does it leave established on what prices the rate is applied, which is 4 percent. Taking into account that prices vary on different exchanges, it is not clear which one should be taken as a reference.
PQJ: Is the sale of NFTs (non-fungible tokens) covered by these laws?
MZ: In Argentina, no law talks about NFT, but only about earnings from digital currencies. An invoice is not even issued for the sale of Bitcoin, for example, because AFIP Resolution 1415 does not contemplate it. Only in case of operating through an exchange, this service provider issues an invoice, but only for the commission charged for carrying out the transaction. Returning to NFTs, the case of Spain serves as an example to think about their tax nature, where the tax entity established certain opinions to classify the nature of this token and its tax scope. In Spain, the sale of an NFT that establishes the right to use a certain image or photograph, to give an example, but that does not grant ownership, is classified, compared to VAT, which there is Value Added Tax, as a service of services and not as a sale of goods. Although the norm presents nuances that it is very extensive to analyze here, the example is good to analyze the doubt that existed in the face of nature about what an NFT is and how to classify it.
Disclaimer: The information and/or opinions expressed in this article do not necessarily represent the views or editorial line of Cointelegraph. The information presented here should not be taken as financial advice or investment recommendation. All investment and commercial movement involve risks and it is the responsibility of each person to do their due research before making an investment decision.
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