In Argentina, a provincial legislature has voted for a law to introduce new taxes on gross income from crypto transactions. The Central Province of Cordoba is now the first to levy crypto taxes in the country involving crypto exchange platforms and retailers.
Approved tax legislation provides a definition of cryptocurrencies
According to CBA4N, the legislator-approved “Tax Act 2021” aims to tax individuals at 4% to 6.5% on gross income from crypto-related transactions. Individuals or companies who receive payments in cryptocurrencies “in exchange for goods or services” are subject to a tax rate of 0.25%.
Citing Cordoba Bitcoin, a local crypto community, the local media company believes other provinces and even the national government could repeat the measure.
Cordoba Bitcoin also clarified to CBA4N that previously there was only a 15% tax, which was based on income, and that cryptos were covered due to the price difference in the year. The Central Bank of the Argentine Republic asked the local exchanges to notify of transactions related to cryptocurrencies.
In this case, the novelty is that the approved bill now gives cryptocurrencies a clear definition:
A digital representation of value that can be subject to digital trade and whose functions – directly and / or indirectly – are intended to represent a medium of exchange and / or a unit of account and / or a store of value.
New rules could deter investors in the industry, warns the expert
The law mentioned by Cordoba’s crypto community is the Income Tax Act, which was amended in 2017 to include crypto assets in its content. Marcos Zocaro, a local tax advisor, told La Nacion the following about the negative side that such a bill could bring to the local economy:
Increasing the tax burden can be dangerous as it not only discourages investments in the sector, but also keeps many cryptocurrency operations informal.
He also pointed out the ambiguity in the definitions of terms like bitcoin or stablecoins under the tax law:
you [cryptos] are brought into the same state against the tax, for example bitcoin, stablecoins and security tokens. Is Bitcoin (which has no underlying asset) the same as a dollar-backed stablecoin? Definitely not.
What do you think of the approval of this law in Cordoba, Argentina? Let us know in the comments below.
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