Key Takeaways
- As per Colindres, the aim behind the move is to grant more financial freedom to businesses and individuals
- Colindres acknowledged that the implementation of the “Final BTC Tax Payment Procedure” faces hurdles due to tech limitations
Honduras’ Prospera Economic Zone, located on Roatan Island, has officially embraced Bitcoin as a unit of account, marking a significant step in acknowledging its role in various commercial, fiscal, and financial transactions.
The announcement, made by Jorge Colindres, the acting manager and Tax Commissioner of the zone, sheds light on the criteria legal entities must meet to officially adopt Bitcoin as their primary unit of account.
This move comes after speculation arose about Honduras possibly following El Salvador’s lead in recognizing Bitcoin as legal tender. It’s worth noting that in 2022, the Central Bank of Honduras refuted reports of Bitcoin legalization, cautioning against cryptocurrency use in payments due to a lack of legal backing.
In a recent post on social media platform X (formerly Twitter), Colindres clarified that the motive behind this decision is to grant more financial freedom to individuals and businesses operating within the Prospera Economic Zone. He stated, “At @ProsperaZEDE we believe in the right to financial freedom and monetary freedom. People should be free to carry out transactions, do their accounting, and report taxes in the currency of their free choice.”
The declaration not only outlines the conditions for entities to adopt Bitcoin as their unit of account but also provides an approved form for making this election. In a bid to simplify the process further, Prospera ZEDE’s General Service Provider will release BTC Election Notification form templates.
Additionally, an upgrade to the eProspera eGovernance platform is underway to streamline data entry and reporting related to the Bitcoin election by entities, aiming to facilitate compliance with this new accounting process.
However, Colindres acknowledged that the implementation of the “Final BTC Tax Payment Procedure” faces hurdles due to technological limitations within the eGovernance system and external regulatory issues. As a temporary measure, entities opting for Bitcoin will calculate their tax obligations internally using BTC as a reference but will report and pay in US dollars or Honduran Lempiras to Prospera ZEDE.
Once these challenges are resolved, entities will be able to report and settle their tax obligations directly in Bitcoin. Those interested in adopting BTC as their unit of account must file a notice with Prospera’s tax commission within 30 days after the relevant tax period.
