Buenos Aires Adjusts Law to make Crypto Mining Activity Taxable

The Argentine province of Buenos Aires has modified its tax laws to introduce cryptocurrency mining as a taxable activity in the new year. The modification could also see crypto staking as taxable.

According to a document presented by Alex Kicillof, the governor of the state, it will now charge a 4% tax on the estimated income generated by mining and processing cryptocurrency. The taxes are exclusive to the provincial government and not related to other taxes payable to the national government.

Furthermore as stipulated by the document, the tax will only apply if the hardware used in carrying out this activity is located in the province. Although the new tax regime is set to kick off in January, there are still some aspects of the law that are undefined and beg for clarity. 

One such aspect that needs clarification is the definition of “equipment”. It’s unclear according to the letters of the document if the equipment is only limited to the proof-of-work hardware that includes ASIC miners and graphics cards, or the computers running staking nodes. If the latter were the case, that would mean staking could also be taxed in this new tax regime.

Key Gray Area

Another gray area is the price at which this tax would be calculated. While the document says the crypto assets will be taxed at the “official or current” value in place, it failed to define the source of the value. It also did not state if the tax will be calculated when the cryptocurrency is mined or at the end of the tax period.

Meanwhile, the national tax authority of Argentina which is referred to as the Federal Administration of Public Revenues (AFIP)  during a mega raid operation uncovered an undeclared Bitcoin (BTC) mining farm.

In conjunction with the government of Buenos Aires Province, a total of 40 individuals were arrested, and items including cell phones, printers, and credit cards amongst others were retrieved during the raid.

Crypto Miners face Difficulties

Generally, the crypto mining business hasn’t been so profitable lately due to a number of reasons.

As previously reported by TheCoinRise there has been a steady decline in the last two years in revenue gauge due to increased energy cost, heavier computational demand, and increased network difficulty.