According to DiarioBitcoin.com, Chile’s Internal Revenue Service(Servicio de Impuestos Internos, SII) have included crypto-assets as a form of revenue for taxpayers in Chile. The users must declare their profits with crypto in a form on their Annual Income Tax Returns, under “other own income and/or third-party income from companies that declare their effective income and do not declare it according to full accounting, attributed, according to article 14 letter C) No. 1.”
It was announced last year that digital currencies were not included to the payment of Value Added Tax (VAT) but should be considered under Income Tax.
In a statement last year, SII had declared that: “The income from the sale of foreign currencies of legal course or assets digital/virtual, such as cryptocurrencies (for example, bitcoins).”
In May 2018, an official letter by the Director of the SII, it was stated that digital currencies were not subjected to VAT payment, but the people who commercialize these assets had to register the operations on tax-exempt invoices, such that the tax agency could monitor the operations.
SII declared that digital currencies come under the category of ‘intangible assets’ which are not subjected to VAT. But, following the rise and usage of cryptocurrencies in the country, the tax agency has decided to monitor the operations behind these assets.
In an interview between CriptoNoticias and lawyer Patrício Bravo, the latter stated:
"[The SII] has arranged taxation in the broadest possible way, this is apparently due to two objectives: on the one hand expand the tax structure as much as possible to cover all types of crypto active 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 ."
He went on to say that the tax is applicable to anyone who holds cryptocurrencies, regardless if he/she is a trader, miner or a holder, and where the assets are located.
The law in Chile requires them to pay tax in April every year, and this will be the first time that the Chileans will pay tax for their crypto-assets as well.
There is still an air of doubt over whether digital currencies are considered legal or not. Many people consider this a positive move as it gives legitimacy to cryptocurrencies. Law experts currently categorize crypto-assets as ‘alegal’.
What do you think this means to the Crypto community? Let us know your thoughts in the comments section below.
This article was originally published on blog.bankofhodlers.com by Joshan Babu.
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