In a recent turn of events, the Argentine government, led by President Javier Milei, has opted to eliminate tax opportunities for cryptocurrencies from the omnibus bill currently being debated in Congress. The bill, officially named the “Law of Bases and Starting Points for the Freedom of Argentines,” seeks to implement extensive reforms across various sectors. Nevertheless, the choice to omit crypto-related provisions is driven by a lack of consensus among lawmakers.
Guillermo Francos, the Minister of Interior, highlighted the urgency of moving forward with the bill’s non-tax components, stating, “The proposal is aimed at generating freedom for economic development. It was essential to get this out quickly. The tax part was smaller and delayed treatment.”
The initial tax determination in the bill allowed taxpayers to declare ownership of previously undisclosed assets, including cryptocurrencies. For the first $100,000 in asset value, individuals would pay a 0% tax rate, while amounts exceeding this threshold would incur a tax rate of up to 15%. This move was seen as an attempt to encourage transparency and reduce tax burdens for citizens holding undisclosed assets.
AFIP’s Approach to Crypto in Argentina
It’s important to note that in Argentina, simply holding cryptocurrencies does not trigger a tax obligation. However, when individuals sell their cryptocurrencies and realize earnings, it becomes a taxable event. According to Argentine accountant Marcos Zocaro, the tax watchdog AFIP recognizes cryptocurrencies as financial assets, subject to varying tax percentages based on asset location. The tax base is determined by the latest market value calculated on December 31 of each year.
The omnibus bill, which has Milei seeking increased legislative powers, has faced challenges in gaining consensus. The exclusion of crypto-related provisions reflects the complexity and sensitivity surrounding the taxation of digital assets. The bill is currently undergoing substantial changes to secure approval in Congress.
In a related move, President Milei previously issued an emergency executive order that deregulated major sectors of Argentine life. This order allowed lease contracts to be denominated and settled in bitcoin, showcasing the government’s willingness to embrace digital currencies in certain aspects of the economy.
As the legislative process unfolds, the fate of crypto taxation in Argentina remains uncertain. The ongoing revisions and debates underscore the challenges of integrating digital assets into traditional financial frameworks.