Cryptocurrency Taxation Guide: What You Need to Know

If you've started investing in cryptocurrencies, you might be wondering how and when to declare the corresponding taxes. Don’t worry—this guide will provide you with the necessary information to help you through this process.

Cryptocurrency Taxes

To get started, consider the following key questions related to cryptocurrency taxes:

-Have you made sales of ETH or other cryptocurrencies with gains? If you have sold cryptocurrencies for more than their purchase price, you need to account for the gains when filing your taxes.

-Have you engaged in trading or swapping cryptocurrencies? Trading or swapping transactions can also have tax implications, so make sure to consider them when filing your tax return.

- Have you made remittances using cryptocurrencies? Sending cryptocurrencies as remittances may also have tax implications that you should be aware of.

- Have you engaged in trading or holding (investment)? Depending on your investment strategy—whether active trading or long-term holding—there could be different tax implications.

If you answered "yes" to any of these questions, you likely need to declare taxes.

Important Note:

Before starting, it’s crucial to highlight that we do not provide tax advice. This guide is intended for informational purposes only and aims to help our users become aware of their tax obligations. If you have any doubts or concerns about your taxes, we recommend consulting a tax advisor or accountant. You might also seek help from a knowledgeable friend.

Your Responsibility:

The responsibility for fulfilling tax obligations rests with you!

Do I Have to Pay Taxes for Using Cryptocurrencies?

Cryptocurrencies are increasingly part of our daily lives. However, tax obligations depend on many factors, such as:

- The total taxable income you received during the year.

- Whether you are an individual or a corporation (company or partnership).

- Whether you are subject to VAT or not.

- Whether you are required to maintain full accounting records.

- Other specific conditions.

For those living in Argentina:

You need to pay taxes when:

- You buy or sell cryptocurrencies and result in a gain.

- You hold cryptocurrencies at the end of the fiscal year without selling them.

Tax Types:

1. Income Tax: 

   - Gains from buying or selling cryptocurrencies are treated similarly to gains from stocks or bonds. According to Law 27430, a minimum taxable amount is set, and a 15% tax is applied to the gains.

2. Personal Assets Tax: 

   - Cryptocurrency holdings should be declared at the end of the fiscal year. If you plan to purchase goods or services with cryptocurrencies, it is advisable to do so with declared funds to avoid issues.

   - The law is not clear regarding whether cryptocurrencies are taxed, leading to differing opinions. Some believe they are taxed, while others view them as intangible assets and therefore exempt. It is generally expected that the tax authority (AFIP) will eventually require tax payments on cryptocurrencies.

3. VAT (IVA):

   - The law does not specify VAT on cryptocurrency transactions, so it is generally agreed that cryptocurrency transactions are not subject to VAT, and no VAT registration is required.

4. Monotributo - Autónomo - Companies:

   - If your activity involves buying and selling cryptocurrencies for profit, it should be billed just like any other asset if done regularly. For other cases, cryptocurrency sales are subject to the rules outlined in Law 27430, and income tax applies similarly across provinces.

 Income Tax Calculation (Law 27430):

When the net gain determination includes results from operations involving the sale of stocks, bonds, securities, digital currencies, and other values, these will be subject to a 15% tax rate."

- There is a non-taxable minimum amount which, for 2018, was $66,917.91; for 2019, $85,848.99; and for 2020, $123,861.17. For 2021-2023, no updates have been provided by the tax authorities, and it is recommended to check with your accountant.

Calculating Gains or Losses:

- Keep a transaction history, which you can download from your wallets in both cryptocurrencies and local currency, and compare the difference between purchases and sales to determine if you have gained or lost.

- This tax applies to both individuals and companies.

Calculation Methods:

- If you bought and sold once, the calculation is straightforward:

  - Sale Price – Purchase Price – Fees = Gross Profit

  - Gross Profit – Non-Taxable Minimum = Net Profit

  - Net Profit * 15% = Tax to be Paid

- For multiple transactions, methods like FIFO (First-In-First-Out), LIFO (Last-In-First-Out), and CPP (Weighted Average Cost) are used.

 Personal Assets Tax

- The law remains unclear on this tax, with differences between local and foreign assets. Generally, it is advised to declare cryptocurrencies as per the tax authority's likely future interpretation.

 Prepare Your Forms

- For income tax and personal assets tax, use the forms downloaded from the AFIP portal. Your accountant will complete them based on the information you provide. For income tax, historical transaction data and fees are sufficient. For personal assets tax, a simple informational declaration is usually adequate.