Reports coming from Chile have revealed the government’s latest decision mandating cryptocurrency earners in the country to pay taxes on their crypto earnings.
Chile’s Crypto Affair
Cryptocurrency development and progress in the country has been fairly healthy, while not altogether the best of situations. The recent decision to introduce taxes into cryptocurrency earnings might just be the required step towards the legitimacy of digital currencies in Chile.
The government’s disposition towards the fast rising crypto sector in the country is quite debatable, and implementation of tax might still be an uncertain positivity or negativity. Aside from a generally bearish market, 2018 became a year that many local exchanges in Chile would be looking to forget. Chilean crypto exchanges lost the support of banks in the country and had their accounts shut out, leaving many to scramble for the little that was left. Suits that followed did not follow the favour the exchanges too, as courts sided with Banks.
Nonetheless, the discouraging atmosphere in Chile has done little to stifle the rate of crypto developments in the country, and the government has finally taken note of he increasing transactions occurring in cryptocurrencies among Chileans. With the robust development, cryptocurrencies might just be a good way of expanding the country’s tax revenue system.
While the government had earlier ruled that crypto and virtual assets are not subject to Value-Added Tax (VAT), labelling them “intangible assets,” the country’s Internal Revenue Service have now gone back on their previous taken stance.
Rules Can Change
Cryptocurrency might be volatile, but rules and government stipulations might just be as flexible. Chile’s Internal Revenue Service (Servicio de Impuestos Internos, SII) has now officially introduced a section for digital & crypto assets in forms that are meant to be filled on taxpayers’ Annual Income Tax Returns. Now Chilean crypto earners are required to register their respective operations, according to local paper Diario Bitcoin, through ‘tax-exempt invoices.’ This way, tax agencies can efficiently keep an eye on them. This was communicated by an official letter that had the signature of the director of SII.
Patricio Bravo, from Bitcoin Chile commented on the latest development, explaining that many Chilean crypto enthusiasts have been waiting on an official input from SII. He said:
“[The SII] has arranged taxation in the broadest possible way, this is apparently due to two objectives: on one hand expand the tax structure as much as possible to cover all types of cryptoassets and, on the other hand, due to the current lack in Chilean legislation of figures specifically designed for this type of instruments, which makes it difficult to generate more specific items.”
It is generally believed that the new development in Chile might be a step in the right direction towards legalization of cryptocurrencies in the country.