Chile’s residents will reportedly have to start paying cryptocurrency-related taxes in April of this year, as the country’s government has included cryptoassets in its books, and put out a form for this specific purpose. As reported by local media, Chile’s residents will have to report income related to cryptocurrency trades as “other own income and/or third-party income.” According to documents from Chile’s Internal Revenue Service (Servicio de Impuestos Internos, SII)
According to local news outlet CritpoNoticias, the SII’s documents detail that income obtained through the “purchase and sale of bitcoins, or any other virtual or digital assets (…) must be declared on the Form No. 22, on the Annual Income Tax Return.” The documents further details that “the acquisition value of the bitcoins, or of the virtual or digital assets in question, whose sales generate the gross income in the corresponding year,” must be deducted as a direct cost to your Liquid Taxable Income.”
CripoNoticias noted that local authorities consider that the “sale of bitcoin or other digital assets isn’t affected by VAT [Value-Added Tax],” as these are intangible assets. To further understand the topic, the news outlet spoke to lawyer Patrício Bravo, a member of the Asociación Bitcoin Chile, a non-government organization supporting cryptos in the country.
Bravo reportedly stressed that the cryptocurrency community was waiting for the SII’s input, as it wasn’t clear whether cryptocurrencies were considered ‘money’ in the country, nor was it clear under which accounting regime these would apply to, among other things. 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
Brave added that the taxes aren’t just applicable to cryptocurrency traders, as miners are also included in the spectrum the government defined. Per his words “taxpayers are understood to be all those who own cryptocurrencies.” While simply owning cryptocurrencies doesn’t mean Chileans owe the government taxes, another tax lawyer, Juan Gregorio Pasten, noted that “when selling cryptocurrencies, the patrimonial gains” are taxable.
Notably, cryptocurrency exchanges have been struggling in Chile. As CryptoGlobe covered they were excluded from the national banking system late last year. This year, the country’s anti-monopoly court resolved to keep their bank accounts open.
A study conducted back in October revealed that only 39% of the country’s residents had heard of cryptocurrencies.