Cordoba’s Provincial Assembly has accepted the crypto taxation bill presented to it and immediately passed it for implementation. Cordoba has now become the first province of Argentina to levy and collect taxes in respect of crypto-related transactions. Now the investors, crypto owners, and retail traders as well as crypto exchanges, have all been brought under the provincial tax net.
It wasn’t long ago when one of the Argentinean Provincial Governments received a draft bill called “Tax Law 2021” concerning crypto tax. Provincial Government Members of Cordoba considered the crypto tax law and after debating the same, gave their endorsement to the law.
Details regarding the Tax Law 2021 suggested that the lawmakers have intended to levy and collect 4% to 6.5% on crypto activities. It was further suggested in the law that gross incomes of crypto investors and retail traders as well as crypto exchanges shall be subjected to tax. Law proposes that any “person” involved in rendering services or exchanging and receives/pay digital currency, shall be liable to pay taxes @ 0.25%.
The law further defines “person” to mean crypto exchanges, crypto investors (whether individual or an entity), and retail traders.
Argentinean crypto community members suggested that there is every likelihood that the law will be copied in other provinces as well.
There are a total of 23 Provinces in the whole of Argentina. Generally, any law relating to taxation is adopted simultaneously by all Provinces through amendments brought at the federal level. Otherwise, this will be treated contrary to the principle of equality and against Argentinean Constitution. Furthermore, the law will force retail traders and crypto exchanges to shift their businesses in those provinces where it is not applicable. This is why the crypto community in Argentina is anticipating Tax Law 2021’s adoption at the Federal level as well.
Cordoba Bitcoin, which is an online Bitcoin and Blockchain community in Argentina also shared its viewpoint on the new law. It told that before the law, the taxpayers were required to pay 15% tax on the earnings/income. It said that imposing further taxes would over-burden the taxpayer and may lead to tax evasion as well. It also criticized the law that when the law was being drafted, the Community was not consulted with. Since the law affects the Community, it was necessary to take them on board for formulating a law based on mutual cooperation.
In any case, the law has been duly approved and has been made applicable, at least in the Province of Cordoba. Earlier, it was the country’s central bank that also required the submission of crypto holding information from crypto owners and crypto exchanges.
What is important for the time being is that “crypto” has been provided legal cover under the law. In particular, crypto has been defined in the law to mean “digital representation of value”. This meant that any goods/payment/services in digital form allowing a person to function and do commerce shall be treated as “crypto”.