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In Argentina, a provincial legislature has voted in favor of a bill to introduce new taxes on gross revenue from crypto transactions. Cordoba’s central province is now the first to impose crypto taxes in the country, involving crypto exchange platforms and retailers.

Approved tax bill defines cryptocurrencies

According to CBA4Nthe legislature-approved “Tax Law 2021” aims to tax people 4% to 6.5% on gross revenue from crypto-related transactions. Also, individuals or companies that receive payments in cryptocurrencies “in exchange for goods or services” will be subject to a 0.25% rate.

Citing Cordoba Bitcoin, a local crypto community, the local media believes other provinces and even the national government could replicate the measure.

Cordoba Bitcoin also clarified to CBA4N that previously there was only a 15% tax corresponding to the revenue, and that this was true for cryptos due to the price difference over the year. The Central Bank of the Argentine Republic demanded that the local exchanges provide information on transactions related to cryptocurrencies.

In this case, the novelty is that the approved bill now provides a clear definition for cryptocurrencies:

A digital representation of value that may be subject to digital trade and whose functions – directly and / or indirectly – are a medium of exchange and / or a unit of account and / or a store of value.

New rules may deter investors in the sector, expert warns

The law mentioned by Cordoba’s crypto community is the Income Tax Act, which was amended in 2017 to include crypto assets in its content. Marcos Zocaro, a local tax advisor, said La Nacion the following about the negative side that such an approved bill could have for the local economy:

Increasing the tax burden can be dangerous because it not only deters investment in the sector, but also keeps many cryptocurrency operations informal.

He also pointed to the ambiguity of the terms’ definitions such as bitcoin or stablecoins under the tax law:

She [cryptos] are put in the same state against the tax, for example bitcoin, stablecoins and security tokens. Is bitcoin (which has no underlying asset) the same as a dollar-backed stablecoin? Obviously not.

What do you think about the adoption of this bill in Cordoba, Argentina? Let us know in the comments below.

Image Credits: Shutterstock, Pixabay, Wiki Commons

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