Taxpayers in Chile are reportedly going to have to pay taxes on cryptocurrency earnings this year, as the country’s Internal Revenue Service (Servicio de Impuestos Internos, SII) has included a section for cryptoassets in a form that has to be filled on taxpayers’ Annual Income Tax Returns.
According to local media, last year the country’s government ruled cryptocurrencies aren’t subject to Value-Added Tax (VAT), as these are seen as “intangible assets.” Chilean taxpayers will pay taxes on crypto-related earnings as these will swell up their total income. In Chile, income taxes are paid annually in April.
Per Diario Bitcoin, the Chilean government has, for the first time ever, included a section in its forms for cryptocurrencies, which will be declared as “other own income and/or third-party income from companies that declare their effective income.”
The same news outlet details that according to an official letter signed by the director of the SII, Fernando Barraza, those who trade cryptocurrencies have to register their operations through “tax-exempt invoices” so the agency can monitor them. Diario Bitcoin notes that a cryptocurrency boom within Chile saw the government start monitoring cryptos, as people are using them as “valid currencies to trade products and services.”
Although Chileans will have to pay taxes on their cryptocurrency earnings, the legal status of these currencies is still being discussed. Nevertheless, the report adds some see the SII’s move as positive as it “offers legitimacy to cryptocurrencies.”
CriptoNoticias, another local news outlet, reportedly spoke with tax attorney Patrício Bravo, a member of a non-government organization called Bitcoin Chile, that revealed the cryptocurrency community in the country was waiting for the SII’s input.
He was quoted as saying:
[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.
As CCN.com has covered extensively, cryptocurrency exchanges in Chile have been struggling as last year they were struck with a banking blockade, that saw financial institutions shutter their accounts.
In various legal battles that ensued, initially cryptocurrency exchanges seemed to have been getting the upper hand as the Fourth Chamber of the Court of Appeals of Santiago ruled that state-owned Banco Estado had to reopen accounts. Later on, however, the Third Chamber of the Chilean Supreme Court rejected appeals, siding with the banks.
Nevertheless, cryptocurrency adoption has been growing in the South American nation. Chilean exchange Crypto MKT partnered with an online payments platform to allow 5,000 local merchants to accept cryptocurrencies, while Buda has added Lightning Network support.
Last modified: August 2, 2020 11:04 AM UTC