It seems that the government in Chile has started to take the idea of imposing taxes over crypto assets more seriously. The crypto investors in the country will require to pay cryptocurrency taxes in the Second Quarter of 2019.
Chilean taxpayers are expected to report their cryptocurrency profits to the Chilean Internal Revenue Service (SII). As SII (Servicio de Impuestos Internos) has included crypto assets in the Annual Income Tax Returns form, which has to be filled by the taxpayers. The section is declared as “other own income and/or third-party income from companies that declare their effective income.”
Last year the Chilean government announced that cryptocurrencies aren’t subject to Value-Added Tax (VAT), considering them as “intangible assets.” However, it should be calculated when calculating annual income tax. By now, when the special section is dedicated to crypto assets, investors will have to pay tax on earnings generated from crypto investments. But, the rate for the crypto taxing is not clear yet.
Further, director of the revenue authority, Fernando Barraza detailed over the matter. Barraza noted that those who buy, sell or trade digital currencies would have to register their operations by following steps which are known as ‘tax-exempt invoices,’ so the agency can oversee them. The government of the country observed a significant surge in Chile regarding crypto space. Due to that, it has started monitoring cryptos, as people are using them as “valid currencies to trade products and services.”
The decision to tax crypto assets is considered mainly as a step forward to legitimizing the trade and use of digital currencies in the country. In Chile, crypto assets are not recognized as a legal tender, but, also are not banned. The legal status of cryptocurrency has been a subject of speculations in Chile, till now.
Notably, the crypto exchange firms in Chile has been busy to fight battles with commercial banks for shuttering their accounts. In the court ruling, the Supreme Court of Chile stated in December that banks can now close such accounts legally. Judges noted that the banks followed the laws on money laundering and terrorist financing. Both the illicit activities are somehow having connections with cryptocurrencies.