Investigation of the Latin American cryptocurrency exchange Buda He has revealed a patchwork of laws, confusing regulations, and unusual concepts that regulate cryptocurrency taxes in the region.
Buda has submitted a series of tax guidelines that describe the measures that cryptocurrency traders must take into account when trying to comply with the authorities of Chile, Colombia, Peru, and Argentina.
In several countries in the region There are different interpretations and concepts of what type of asset is considered cryptocurrency.
Legal definitions of cryptocurrencies in Latin America
Chile, for example, sees every cryptocurrency as a “digital or virtual good”. Colombia as an “intangible good”; Peru as a “mobile asset”, while there is currently no official definition in Argentina.
The guide highlights many questions about when to pay taxes to own or trade cryptocurrencies.
In Peru, authorities expect people to pay taxes on cryptocurrencies if they receive payments in cryptocurrencies as a product of the recipient’s profession.
When should people pay taxes on cryptocurrencies?
For Chile and Colombia, a concept called “Alienate” is used, which basically means sales. The term is generally understood when the person no longer owns the cryptocurrency, regardless of whether they have sold, exchanged or done other business with it.
thats why For both countries, people have to pay taxes when they sell cryptocurrencies.
Due to the lack of an official definition by the Argentine government for cryptocurrencies, there are no guidelines on when Argentines can pay taxes on them.
In the countries mentioned Local or foreign cryptocurrency exchanges are not responsible for taxation on behalf of the customer as it is the responsibility of each taxpayer to declare their obligations to the local authorities.
The legal status of cryptocurrencies in the region
Cointelegraph in Spanish explained the legal status of cryptocurrencies in several Latin American countries in early 2020.
For example, in the case of Bolivia, it is illegal to use bitcoins or other cryptocurrencies for transactions because it is “a currency that is not issued and controlled by a government or an authorized body”.
Ecuador is another country in the region that banned digital assets in mid-2014. However, the laws in Ecuador don’t seem to apply exclusively to cryptocurrencies, so there are still Ecuadorians who actively trade bitcoins.