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Argentina Introduces New Tax Law on Cryptocurrencies

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Argentina Introduces New Tax Law on Cryptocurrencies

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According to an official announcement dated November 16, the Argentine authorities announced a new tax regime for the exchange of cryptocurrencies.

The tax is effective immediately and is subject to government check tax. This is its tax on credit and debts. As a result, this tax will come from purchases and sales executed on cryptocurrency exchanges.

Before this statement, cryptocurrency transactions were classified as cash transactions. Therefore, they are tax-free. This new law imposes a tax of 0.6% on them. However, cryptocurrency transactions have been subject to capital gains tax since 2017.

The notice reads;

“The exemptions provided for in this decree and in other regulations of a similar nature will not be applicable in those cases in which the movements of funds are linked to the purchase, sale, exchange, intermediation and/or any other operation on crypto assets, cryptocurrencies, digital coins, or similar instruments, in the terms defined by the applicable regulations.”

Users will bear the cost of this new tax as the stock market can put the burden on them. It only affects the exchange of cryptocurrencies with Argentine bank accounts.

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The new tax rules will definitely have an impact on the country’s market, especially since citizens are very enthusiastic about cryptocurrencies.

Argentina Regulation in Accordance with Mass Adoption

With citizens flooding the market, Argentina could regulate cryptocurrencies more. 

Argentina’s Central Bank Governor, Miguel Pesce said the country will pay more attention to the cryptocurrency market. At a meeting organized in September 2021, he stated that the bank would “closely monitor” the crypto market.

The introduction of new tax regulations is just one step on a long regulatory path. This has the advantage that the government seems ready to allow the crypto market to go ahead. Volatility seems to be a big issue. However, Pesce seems to embrace the idea of making payments in cryptocurrency.

Also, more reasonable regulation could attract investors who are more hesitant to enter the market, lacking clear regulation. Cryptocurrencies are very popular in Argentina and Bitcoin purchases rose after the stock market crashed in 2019.

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