Argentina’s Buenos Aires province imposes tax on cryptocurrencies The new proposal will amend tax laws to introduce cryptocurrency mining as a taxable activity and impose a 4% on income calculated by these operations. However, it is still unclear whether staking will be taxed.
Buenos Aires Adds Cryptocurrency Mining to Taxable Activity
The province of Buenos Aires in Argentina has approved a project to add cryptocurrency mining as a taxable activity next year. The documentpresented by Governor Alex Kislov is formally described as “Crypto Asset and/or Cryptocurrency Transaction Processing and Verification Services (Crypto Asset and/or Cryptocurrency Mining)” Proving activity. An aliquot of 4% of the income generated by these operations will be required.
Taxes are paid to provincial governments and are not related to other taxes set by the Argentine government. The document further clarifies that this tax applies only if the hardware used to deploy this activity is located in state jurisdictions.
Although the tax will come into effect in January, there are still some undefined elements regarding the implementation of this new tax.
Questions Remain
The questions analysts have about the application of this tax are primarily related to his two areas. The first has to do with the definition of taxable equipment. If the approved document only references proof of work hardware, only ASIC miners and graphics cards are subject to these taxes. However, staking may also be taxed if the computer running the staking node is also considered part of this hardware.
Additionally, Argentinian accountant Marcos Zócalo questions the price at which mined (or staked) cryptocurrencies are taxed. The document states that these cryptoassets are taxed at “official or present value” but does not define the source of these values, which varies from exchange to exchange. It is unclear whether it is calculated at the time of mining or when the tax period ends.
In April, Buenos Aires announced that it would allow users to pay their taxes in cryptocurrency starting next year. The city also has a project using a blockchain identity system and will host an Ethereum node as part of its 2023 push to digitize and modernize.
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