Key Takeaways
- Crypto users in Argentina to pay crypto taxes according to their trades in the provinces of Tucuman and Cordoba.
- Cryptocurrencies in Argentina have been grouped with all other international currencies and are therefore subject to tax.
Argentina has enacted cryptocurrency tax in some provinces. Users who trade and hold cryptocurrencies are now required to report their earnings and pay taxes in two provinces, i.e., Cordoba and Tucuman. This is a new provincial regulation stating that when cryptocurrencies are traded, they will be taxed similarly to other international currencies.
This effectively means that cryptocurrencies are treated as other international currencies under regulation in these two provinces. The province of Tucuman recently passed an amendment to the law’s article 223. The law’s article 223 states that
“Purchase and sale of foreign currency and government securities. The operations of the purchase and sale of digital currencies are included in this subsection”.
Cordoba passed a similar resolution earlier this year, determining that cryptocurrency trades will be taxed. Still, it also extends this tax to people or businesses who receive cryptocurrency payments for their goods or services.
The inclusion of cryptocurrencies in the scope of these laws is being considered in several countries worldwide. It is owing to the growing popularity of these instruments as both an asset class and a payment method. Governments are beginning to realize that allowing these payments to go unregulated is losing out on a lucrative revenue stream.
Argentina’s central bank announced a sharp reduction in the number of dollars individuals could purchase, citing concerns that outflows of foreign exchange reserves would accelerate following President Mauricio Macri’s abolition. However, after the government set a monthly limit on the number of dollars each citizen could buy, the cryptocurrency began to gain traction in Argentina. This was the tipping point for a country not known for its cryptocurrency involvement to become interested in these new crypto tools that offered a savings alternative in the face of the previously stated situation.
But cryptocurrency payments aren’t the only thing that’s catching on in Argentina. Because of its low energy costs, the country has become a popular choice for bitcoin mining companies like Bitfarms, which is currently constructing a Bitcoin mega-mining farm to take advantage of the area’s low energy costs.
Grodzki mentioned the reasons for Bitfarms’s decision to locate in Argentina. The farm will be built inside the power company that provides the energy. The energy supplied by the power company will make it an ideal location for Bitfarms. Bitfarms signed a 210 MW, eight-year contract that ensures power supply at a low cost. Grodzki further elaborated that the Argentina facility is planned to produce Bitcoin using power at the attractive rate of just US 2.2 cents per kilowatt-hour, substantially reducing our already low cost of mining Bitcoin.
