Home Business Tax Chilean Citizens Will Begin Paying Cryptocurrency Taxes in 2019

Chilean Citizens Will Begin Paying Cryptocurrency Taxes in 2019

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.”

Santiago Chile Bitcoin
Despite the legal ambiguity surrounding cryptocurrencies, Chilean authorities will begin taxing adopters this year.

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.

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.

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Must Read

Bitgo Plans to Launch Wrapped Bitcoin on the Tron Blockchain

Members of the crypto ecosystem will soon be able to leverage WBTC via the Tron (TRX) network. Just like the tokenized BTC created using Ethereum’s ERC20...

Ethereum’s Long Term Chart Is Extremely Simple To Read

The weekly Ethereum chart, as opposed to the daily chart, is simple and concise. There are 2 simple...

US Department of Transportation Says Blockchain Has Many Applications For Unmanned Aircraft Systems (Drones)

Blockchain technology could assist with adjusting and improving current technical challenges in the expanding business of commercial drone delivery, said the US...

Security tokens, blockchain settlement draw interest from institutions: MIT Bitcoin Expo panel

Amid growing competition between providers, institutions in the traditional finance space are looking at blockchain as another way to offer value to...

Networking 2.0 at Blockchain Life 2020

Make hundreds of connections at Blockchain Life 2020 The 5th Blockchain Life 2020 returns to Moscow on April 22-23 at the unique media...