Crypto Owners In Argentina Are Relieved, The Government Will Not Withdraw Taxes

The Argentine government has revoked the tax rules for crypto. (Photo; Doc. Codigocba)

JAKARTA - The Argentine government, led by President Javier Milei, has removed tax incentives for crypto assets from a draft omnibus law submitted to Congress earlier this month. The bill, entitled "Basic Law and Initial Points for Freedom of Argentine citizens," aims to reform in various sectors, including authorizing the president to issue direct regulations without going through Congress.

This decision was taken after receiving rejection from some lawmakers, who consider tax incentives for crypto assets a form of pardon for tax evaders. Home Secretary Guillermo Francos said the government decided to focus on other parts of the draft law that is more important to drive economic growth and freedom of citizens. He said:

"We would like to give Argentine citizens the opportunity to develop their potential without a hitch. The tax section of this bill is not very significant and the discussion can be postponed."

In the previous draft law, the government provided tax incentives for parties willing to report previously unregistered asset holdings, including crypto assets. Taxpayers are not taxed for the first value of 100.000 (IDR 1.57 billion) of the asset, and only pay taxes of up to 15% for the value of assets that exceed that amount.

According to tax rules in Argentina, having crypto assets is not subject to the obligation to pay taxes, unless the assets are sold and generate profits. Marcos Zocaro, an accountant who is an expert in crypto, explains that the sale of crypto assets is considered a tax event that must be reported and taxed according to applicable rates.

However, Argentina's tax authority, AFIP, considers crypto assets as financial assets, meaning taxpayers must pay taxes on the value of these assets every year. The value of crypto assets is determined based on the last market price on December 31.

The draft omnibus law is still in the process of being discussed and revised in Congress, and it is not yet known when it will be passed. Previously, President Milei had issued a number of executive orders that regulate vital sectors in Argentina, such as banking, trade, and housing. One of these executive orders allows Argentine citizens to make rental contracts in cryptocurrencies, such as bitcoin.