Chile is joining the leagues of countries taxing cryptocurrencies earnings. The country plans to start deducting tax from gains registered from activities involving the digital asset market by, April 2019.
Crypto Included in the Annual Income Tax Returns Form
The country has however not made known its projected rate. However, the country’s revenue authority has informed residents of the country to brace up, as it has included crypto assets in the Annual Income Tax Returns form.
This is not Chile’s first time of introducing legislation relating to taxing cryptos. Chile’s revenue authority excused cryptocurrencies from Value Added Tax laws just last year. The agency labeled them as “intangible assets”.
In light of this characterization, a crypto investor will need to document their earning while engaging in the crypto market. This earning will, in turn, be taxed by the agency in line with a rate to be set in the future.
In its bid to properly monitor citizens crypto activities, the agency expects a “tax-exempt invoices” to be filed. This was confirmed by Fernando Barraza, director of the revenue authority, in a recent statement.
Barraza stated that:
“citizens who buy, sell or trade virtual currencies will have to register their enterprises by completing what is known as “tax-exempt invoices.” These invoices allow the Internal Revenue Service to monitor their operations.”
According to a recent report released by the agency, the Chilean government is now keen on monitoring cryptocurrency activities of its citizens and resident as the use of digital assets has reached an unprecedented height.
Legal Status of Cryptos
In Chile, the legal status of digital assets is still a bit murky. Judging by a recent ruling from the country’s supreme court, giving banks the right to close crypto exchange’s account without prior notice, the government’s position is not as clear cut as needed.
The revenue agency’s new tax policy for cryptocurrency can be construed as a pertinent milestone in the adoption of cryptocurrency in the country as a legal entity.