By Alicia Maher
A new crypto tax system is emerging in Argentina that requires its citizens to pay their taxes based on locations. Tucuman and Cordoba provinces have signed into law a new crypto tax model that warrants its citizens to reveal their crypto holdings and pay their taxes based on trades done in the designated areas.
The provinces disclosed that taxing cryptocurrency holders is due to the fact that digital assets are grouped together with international currencies. Reports reveal that other provinces in the country are following in the footsteps of Cordoba and Tucuman.
Digital Asset Taxation in Argentina
So far, only Cordoba and Tucuman have implemented the new cryptocurrency tax model in the country. According to news outlets in the South American nation, Tucuman’s new digital asset taxation system came after an amendment to article 223. Summarily, the law states that trading digital currencies will be taxed alongside government securities and trading fiat currencies.
Cordoba followed in Tucuman footsteps and signed a similar resolution early this year. Although digital assets transactions will be taxed, tax provisions will be extended to people or firms getting paid in these assets for their products and services.
The news of the new crypto regulation system means that users will be taxes trading and holding digital assets will be treated as those holding foreign currencies. Users that trade and hold digital assets will have to pay taxes in the two provinces after declaring their holdings.
The Global Call to Tax Cryptocurrency
Taxing cryptocurrency trades is one thing the world has been clamoring for a long time. With cryptos becoming more popular as an asset class and adopted as the day goes, several countries are considering putting the industry under the microscope. Governments are now realizing that a lot of things happen in the sector that are unchecked, including the use of these assets to hide wealth with the aim to avoid paying taxes. Aside from that, the money flowing through the industry is massive, and could act as a lucrative source of income for the government.
The Mexican government is considering implementing a tax system that deducts 20% from crypto trades. On Monday, the United States government finally signed into law the Infrastructure Bill with the legislation on crypto reporting requirements to checkmate crypto-based businesses. The bill stipulates that crypto asset transactions above $10000 be reported to the IRS.
Argentines started picking up interests in digital assets after the government put a limit on the amount of cash a citizen could use monthly. Cryptocurrency became an alternative to money savings, and the citizens decided to capitalize on it.
It isn’t only payment that made Argentina become a household name in the crypto world. The country has become an exciting spot for Bitcoin miners due to its cheap energy. Companies, such as Bitfarms, are already constructing a massive mining facility to take advantage of the affordable rate.