This initiative would allow taxpayers to legalize their crypto assets without extensive documentation, subject to a progressive tax rate structure.
Under the new leadership of President Javier Milei, known for his support of Bitcoin, Argentina is contemplating a new legislative measure aimed at streamlining the legalization of cryptocurrency assets, including for those who have not settled their tax obligations.
This proposed law intends to introduce broad reforms, providing President Milei with increased authority to implement policies directly, circumventing the usual legislative procedures.
Interior Minister Guillermo Francos highlighted the bill's focus on economic freedom and the urgency of its introduction, noting that tax considerations were a secondary and postponed aspect of the proposal.
Titled the “Law of Bases and Starting Points for the Freedom of Argentines,” the bill presented to Congress on December 27 features a key component called the "asset regularization scheme."
This scheme allows taxpayers to declare their cryptocurrency holdings with reduced requirements for proving their origin. The scheme outlines a tiered tax rate system for declarations made within specific periods:
5% tax rate for declarations made by March 2024
10% tax rate for declarations from April to June 2024
15% tax rate for declarations from July to September 2024.
This initiative represents a shift from Argentina’s traditional tax policies, aiming to facilitate the inclusion of digital currencies in the national economy.
Currently, Argentine law does not tax the mere possession of cryptocurrencies, but profits from their sale are taxable. The AFIP, Argentina's tax authority, treats digital currencies as financial assets, requiring taxes based on their market value at the end of each year.
Since his election, President Milei has voiced his intention to support Bitcoin and the principles of decentralization. Nevertheless, the implementation of specific pro-crypto regulations is still pending, although there have been hints at possible decrees to legalize Bitcoin transactions in Argentina.
Although this legislative proposal is a critical move towards more accommodating cryptocurrency policies, its final approval and implementation depend on the consensus within the Argentine Congress.
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