Key Takeaways
- The asset regularization part of bill suggested a simple tax of 5% on all assets declared by the end of March 2024
- Under the proposed scheme, taxpayers would have the option to legalize their crypto assets without extensive documentation
Argentina, steered by President Javier Milei, a known supporter of Bitcoin, is contemplating a bill to streamline the process of legalizing cryptocurrency holdings, even for those with outstanding tax liabilities.
This proposed legislation is a sweeping reform that would grant President Milei expanded legislative powers to act directly across various domains, bypassing the traditional parliamentary route.
Guillermo Francos, the Minister of the Interior, highlighted, “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 bill, titled the “Law of Bases and Starting Points for the Freedom of Argentines,” introduced to Congress on December 27, includes a crucial provision known as the “asset regularization scheme.”
However, recent reports indicate that the clause about asset regularization, proposing a one-time tax on various types of previously undeclared assets, has been removed from the omnibus bill. This part of the bill suggested a simple tax of 5% on all assets declared by the end of March 2024, 10% from April until the end of June 2024, and 15% from July until the end of September. The regularization scheme covered cryptocurrencies and other assets such as real estate, personal property, stocks, and securities.
In December 2023, Argentine Minister of Foreign Affairs, International Trade, and Worship Diana Mondino claimed the government would allow the use of Bitcoin in the country through a decree, which has yet to happen. However, the “Bases for the Reconstruction of the Argentine Economy” decree, passed on Dec. 20, 2023, included provisions that debtors could pay in currencies “not recognized as legal tender” in Argentina.
President Milei, who won Argentina’s 2023 presidential election amid persistent inflation, has not publicly spoken about digital assets since taking office in December 2023.
In Argentina, merely holding cryptocurrencies does not incur tax obligations, but any gains realized from selling them are subject to taxation. The Argentine Tax watchdog, AFIP, classifies cryptocurrencies as financial assets, requiring tax payments proportional to the asset’s market value as of December 31 each year.
