In a recent legislative shift, Argentine President Javier Mire, together with Economy Minister Luis Caputo, effectively scrapped the proposed tax exemption for cryptocurrencies, changing key components of the “Foundations and Starting Points of Argentine Freedom” bill. The decision marks a significant departure from Argentina’s previous more favorable stance on Bitcoin and digital assets.
Pro-Bitcoin President Milei cancels tax exemption
As first reported by Argentinian tech outlet iProUP, the original draft of the bill included an asset regularization provision that proposed a one-time tax on various types of undeclared assets, including cryptocurrencies.
The bill’s tax provisions plan to allow Argentinian citizens to disclose ownership of previously unreported assets such as cryptocurrencies, applying a 0% tax rate on the first $100,000 of value, with a tax rate of up to 15% on the value of assets above that threshold. .
However, following a decision by President Milley and Secretary Caputo on Friday, this section of the bill was removed. Interior Secretary Guillermo Francos explained that this was due to delays caused by the legislative process.
Francos said that “the Ministry of Finance is very small, delaying the processing of the initiative in Parliament.” He further emphasized that “the Basic Law aims to create freedom for economic development” and the elimination of the tax part is crucial to speed up the realization of this goal.
The removal of tax exemptions for cryptocurrencies has reignited discussions on Argentina’s current tax regime for digital assets. Accountant Marcos Zocaro clarified to iProUP that “the most important taxes involving cryptocurrencies are income and personal property taxes.” Zocaro further elaborated: “For individuals, simply purchasing digital currencies ’ is not taxed. Ganancias tax the profits generated from the sale.”
Argentina’s Crypto Tax
Regarding personal property taxes, Zocalo noted that there is an ongoing debate over whether Bitcoin and cryptocurrencies are taxed or exempt, as the Personal Property Law does not specifically mention them. However, he confirmed that tax authorities have been considering taxing cryptocurrencies since 2022.
Sebastián M. Domínguez, director of SDC Asesores Tributarios, stressed that it is necessary to declare taxpayers who own cryptocurrencies if their assets exceed the legal amount. He emphasizes, “In the case of movable property, many accountants consider market value, but the treatment given is the purchase cost.”
Maria Inés Brandt of the law firm Marval, O’Farrell & Marval outlines the taxation process for Bitcoin and cryptocurrency sales. Brandt explained that “Argentinian residents must pay a 15% income tax on income derived from the sale of cryptocurrencies.” She further added that for companies, profits are taxed at progressive rates of 25% to 35%, depending on the topic , plus a potential dividend distribution of 7%.
This policy change under President Mire, known for his liberal economic approach, can be seen as a pivot towards a more conservative stance on digital asset regulation and taxation. Samson Mow, the Bitcoin advisor to the President of El Salvador, revealed in November last year that he planned to meet with Argentina’s “supporting Bitcoin” President Milei to discuss incorporating BTC into Argentina’s economic framework.
According to Bitcoinist reports, Milei won Argentina’s 2023 presidential election. He has previously described the central bank as a “scam” and declared, “What Bitcoin represents is the return of money to its original creator, the private sector.” However, since taking office as president in December 2023, he has been negative about Bitcoin Maintaining public silence on currency-related issues.
At press time, BTC was trading at $42,659.
Featured image created with DALL·E, chart from TradingView.com
