Argentina Extends Crypto Taxation to Individual Credit and Debits

Tax authorities in the South American nation of Argentina have announced a new regime whereby individual transactions involving cryptocurrencies can now be subjected to taxation. Effective immediately, local media reported that the transactions involving digital currencies are subject to Argentina’s tax on credits and debts.

Just like South Korea, prior to this new rule, P2P transactions on digital currencies were exempted from paying taxes, despite an existing law since 2017 that made provisions for capital gains on crypto to be taxed. 

“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 cryptoassets, cryptocurrencies, digital coins, or similar instruments, in the terms defined by the applicable regulations,” the government said. 

Under the new tax regime, retail transactions will be subjected to a rate of 0.6%, the same that applies to all banking transactions, including cash deposits, cheques, and wire transfers. The Argentina taxation rule is in a bid to help rebalance the inflation-ridden nation, as the world continues to battle the after-effects of the coronavirus pandemic.

Crypto Taxation: Others to Follow a Similar Move 

The taxation of crypto-based incomes and transactions is a move many countries are looking forward to making. 

Government regulators have often bemoaned how much flows around in the digital currency industry, with none getting into the hands of the state or state officials. Despite the fact that cryptocurrencies offer a way for individuals to conduct anonymous transactions, a number of Anti-Money Laundering (AML) systems are now being put into place to aid effective monitoring. 

Through digital currency exchanges or brokerages, government watchdogs are able to get the right insight into user’s transactions, forcing everyone to be eligible to pay their taxes as required. This model will work ideally in Argentina, as the country’s younger populace is beginning to take to crypto as they look to avoid the country’s currency being devalued at a fast rate.

While there are a number of countries that already levies a tax on crypto gains, more entities including Slovenia are on track to follow Argentina’s move in the near future.