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Argentina: Javier Milei’s Bold Move To Ditch Crypto Taxes

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In a significant move to bolster Argentina’s position in the global crypto arena, President Javier Milei’s administration has submitted a groundbreaking bill to waive tax obligations on cryptocurrencies to Congress. The proposed legislation, named the “Law of Bases and Starting Points for the Freedom of Argentines,” aims not only to eliminate taxes on digital assets but also to grant legislative powers to President Milei, allowing direct action in various sectors without Congress intervention.

Argentina
Image Source: DutchLibertarian

The bill, however, faced a setback as Minister of Interior Guillermo Francos revealed the removal of proposals related to cryptocurrency taxes due to a lack of consensus in Congress. Emphasizing the urgency of the bill, Francos asserted that the tax component, though delayed, was secondary to the overarching goal of fostering economic freedom.

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.

President Milei, who assumed office in December 2023, has exhibited a fluctuating stance on digital assets. Despite devaluing the peso by 50%, he has in the past championed Bitcoin as a means to return money to the private sector. Crypto enthusiasts are hopeful that the bill, if approved, will propel Argentina towards crypto integration, despite the implicit ban on banks processing crypto transactions.

Argentina Steal Spotlight From El Salvador in Crypto Race

In contrast to El Salvador, which experienced a plateau in Bitcoin adoption outside of specific tourist areas, Argentina is emerging as a trailblazer in the crypto space. Escalating inflation rates, soaring to 147% in 2023, coupled with President Milei’s pro-Bitcoin stance, are driving factors behind Argentina’s increasing affinity for digital currencies.

Javier Milei’s victory in the summer election on August 13 not only hinted at potential economic policy shifts but also triggered a remarkable 20% surge in Bitcoin’s value within a day, reaching 10.2 million Argentine pesos. This political shift, combined with innovative ways by individuals and businesses to circumvent traditional financial systems, positions Argentina as a promising player in the global crypto landscape in 2024.

India’s major crypto exchanges are on the DGCI radar for alleged tax evasion

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India’s Directorate General of GST Intelligence [DGCI] has raided several crypto exchanges operating in the country after detecting a tax evasion by Binance owned exchange WazirX two days ago. In what could be termed as a not-so-good start at the beginning of the year for the Indian crypto scene, the enforcement agency recovered around $9 million worth of tax evasion during the clamp down on the trading platforms’ premises with the help of Mumbai CGST.

As per sources, nearly half a dozen offices of cryptocurrency service providers have been searched and massive Goods and Service Tax [GST] avoidance has been discovered by the agency. The DGGI is investigating Coinswitch Kuber by M/s Bitcipher Labs LLP, CoinDCX by M/s Neblio Technologies PVT. LTD, BuyUCoin by M/S I Block Technologies Pvt. LTD., and Unocoin by M/s Unocoin Technologies Pvt. LTD. Sources revealed that the above-mentioned trading firms are providing facilitation intermediary services for buying and selling crypto coins. These services attract a GST rate of duty of 18 percent which is alleged, all of these entities have been evading.

An official source, who was part of this search team, told a news agency, these service providers were charging a commission for their facilitation to indulge in exchange of bitcoins but were not paying GST tax. These transactions were intercepted by DGGI and they were confronted with evidence that proved non-payment of GST.

Where is India’s crypto regulation heading?

After the developments, WazirX blamed the prevailing lack of clarity in the crypto regulation, while saying it’s “been diligently paying tens of crores worth of GST every month.” In their own words, the exchange noted,

There was an ambiguity in the interpretation of one of the components which led to a different calculation of GST paid. However, we voluntarily paid additional GST in order to be cooperative and compliant. There was and is no intention to evade tax. That being said, we strongly believe that regulatory clarity is the need of the hour for the Indian crypto industry.

Having said that, currently, there are no clear regulations in India around how these crypto exchanges or investors would be taxed as it remains undecided if cryptocurrencies would be categorized as currencies, securities, or a type of asset.

South Korea Pushes Crypto Tax Rule To 2022

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As the value of the crypto industry has been going on an uphill journey, regulating these assets has become just as important. South Korea’s government seems to be taking the essential measures to do so. While the South Korean government revealed that it was all about regulating crypto, a recent delay on regulations pertaining to the digital assets was imposed.

South Korea To Enforce Crypto Tax Rule In January of 2022

While the crypto industry upholds privacy and anonymity, several seemed to have taken advantage of it and even went on to engage in tax evasion. Keeping this in mind, the South Korean government decided to spruce things up a bit. Back in June, the South Korean authorities part of the Ministry of Economy and Finance put forth the idea of taxing the profits garnered via crypto assets. This further received a thumbs up in July and a 20% tax on crypto profits was to be implemented by October 2021.

However, as per a recent report by a local South Korean news agency, the 20% tax on crypto gains was shifted to January 2022. In a recent meeting preceded by the South Korean National Assembly, the government decided to give the 20% tax on gains acquired via crypto trading a green signal. South Koreans that engage in crypto trading activities that go beyond $2,000 would reportedly be taxed by 20%. In a recent amendment proposed last week, a delay was urged to the law that was coming into force in October 2021. The local crypto platforms reportedly suggested that they lacked the time to formulate a precise tax reporting foundation.

The South Korean government seemed to have approved this request and pushed the crypto tax rule to 1 January 2022 from October 2021. This is said to give the local crypto platforms a three-month window to put into place a credible tax reporting base.

South Korea has been time and again proving that it was more than just its pop culture. The country has been sifting through the crypto-verse and seems to have garnered an increased adoption across the region.

Bitcoin, Ether Will Soon Be Accepted For Tax Payments in Swiss Canton Zug

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Just a few years ago, cryptocurrencies were viewed merely as assets that paved the way for illicit activities. Even though many authorities still continue to denounce digital assets, the ones in support of these assets have witnessed an increase. Currently, there are many instances that indicate that cryptocurrencies will soon find a prominent position in the global economy. A piece of recent news from Switzerland stands as substantial proof of the same.

Taxes In Crypto

On Thursday, one of the states of among the 25 others of the Swiss Confederation, the canton of Zug announced the acceptance of prominent cryptocurrencies, Bitcoin [BTC] as well as Ether [ETH] for tax payments. The announcement further revealed that the Zug administration had collaborated with Zug-based crypto-financial company Bitcoin Suisse. This initiative, however, will commence from February 2021.

Speaking about the canton’s latest move towards technological innovation, Heinz Tannler, the Finance Director pointed out the necessity for the inclusion of crypto in everyday life. He added,

“As the home of the Crypto Valley, it is important to us to further promote and simplify the use of crypto currencies in everyday life. We can make one by being able to pay tax debts with Bitcoin or Ether big step in this direction.”

Zug would reportedly be the first Swiss canton to accept cryptocurrencies for tax payments. The canton’s official website further highlighted that both individuals, as well as companies, could utilize this forthcoming change. Citizens who would wish to pay taxes via crypto are required to let the tax administration beforehand. Soon after this, the taxpayers would be given a QR code via email. To prevent any sort of impact on the payments considering the volatile nature of cryptocurrencies, the Finance Director further stated,

“We are not taking any risks with the new payment method, as we always receive the amount in Swiss francs even when paying in Bitcoin or Ether.”

Bitcoin Suisse is not new to the crypto-verse. The platform made its way into the market back in 2013 and has been a prominent platform of the “Crypto Valley.” The CEO of Bitcoin Suisse, Arthur Vayloyan also commented on its latest collaboration and said,

“The combination of trading technology and payment transactions with cryptocurrencies enables us to offer the taxpayer a good user experience and to offer the canton of Zug a mature service.”

Previously, Ohio created a buzz after it announced that it would accept crypto for tax payments. However, only two companies were paying taxes through crypto and the website was eventually taken down.

American Cryptocurrency Tax Defaulters Receive Another Warning Letter

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  1. Internal Revenue Service ( IRS) has sent another stack of letters to alleged cryptocurrency tax defaulters.
  2. The letter warns U.S. crypto holders that they have information that indicates that they may have misreported their income and pay taxes on their cryptocurrency transactions.

According to a Bloomberg report, the U.S. tax agency verified that it had sent warning letters to cryptocurrency users dated 14 August.CoinTracker.io distributed a copy of the IRS warning letters on its website, claiming that they had received it from one of the users. The crypto tax service provider also claimed through the blog post that numerous Reddit users had received the same letter.

Cryptocurrency tax defaulters warned to file taxes correctly

The IRS warning letter requires U.S. residents to file amended returns or delinquent returns “within the notification period ending in August 2020. Furthermore , the agency cautioned cryptocurrency tax defaulters that they already have accurate records of cryptocurrency owners in the U.S and legal action would be taken if the tax defaulters do not meet their tax liabilities by the due date.

As has been the case in the past, the tax authority can send three different types of letters to taxpayers. The category depends on the state of the ratepayer and the extent to which the body opines that the subject intentionally avoids paying taxes.

According to CoinTracker’s head of Tax and Strategy, Shehan Chandrasekera, the initial two letters, letters 6171 and 6174-A, are intended for educational, and they are more lenient. However, in case the taxpayer receives the third one, letter 6173, they should take action immediately because it bears consequences and is more intense. Notably, this letter entails the risk of taxpayer inspection.

U.S. crypto tax laws

Trading crypto assets in the United States are subject to capital gains tax. That implies that at any moment that a U.S. taxpayer buys or sells virtual currencies, they must calculate and report the profits or losses made. Furthermore, those who receive their wages in the crypto form are also required to report this as revenue.

The IRS’s new drive follows a similar campaign where the agency sent warning letters to over 10,000 alleged cryptocurrency tax defaulters back in 2019. Back then, the agency issued the three different letters, requiring taxpayers to respond quickly to the third one.

United States IRS Decides to Look into Dealing with Cryptocurrency Taxes

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The cryptocurrency industry has been the subject of several regulatory concerns in the last few years. Most of these concerns have often been aimed at two major sectors of the industry: security and the vulnerability to massive fraud.

When the cryptocurrency industry grew, so did the size and scope of the scams. The United States Internal Revenue Service [IRS] was the latest agency to move into the virtual asset world with a plan to combat cryptocurrency tax evasion.

Just last week, the IRS released a paper that requested independent experts to help crackdown on cryptocurrency tax evasion. The [SoW] report produced by the IRS set out their criteria, which focused mainly on tax returns on cryptocurrency gains/losses. Sources close to the IRS have reported that it would cover the taxation of small-time players

An excerpt from the SoW added:

“Taxpayer transactions can be relatively simple, or in some instances, they can have hundreds of thousands of digital asset transactions in a year.”

Reports have indicated that the IRS has been tracking the cryptocurrency space for some time. One of the first steps to be taken by the IRS would include trading of cryptocurrencies and related procedures. The IRS recognized that billions of dollars worth of transactions occur on these exchanges, while fraud occurs simultaneously.

At present, traders still have the option to obtain a crypto tax software and calculate the exact rate to be reported. The IRS had to reveal this information because reports circulated that the Agency needed requesting crypto firms to disclose user data.

The latest move from the IRS was met with some trepidation by officials in the cryptocurrency space. David Kremmer, Chief Executive Officer of CryptoTrader. Tax claimed that a lot of people in the industry would not be pleased with the decision, but those legitimate traders would have nothing to worry about.