Argentina Notifies Crypto Tax Evaders

The Administración Federal de Ingresos Pblicos (AFIP), which is Argentina's Tax Authority, has implemented measures to combat tax evasion committed by holders of cryptocurrencies. The organization disclosed that it had communicated with more than 3,997 taxpayers who possess cryptocu

 

AFIP Requests That Crypto Asset Holders Revise Their Tax Statements


In the notices, it was pointed out that the tax returns submitted by these taxpayers had some irregularities. For instance, their tax returns did not accurately reflect the amount of cryptocurrencies they held.

In the meanwhile, the tax returns that are being examined correspond to their activity in the year 2020. The local tax authority has been cross-checking the tax payments of consumers by using data from the local cryptocurrency exchanges.

In addition, AFIP did a double check by comparing the information with the taxpayers' actual bitcoin holdings. The findings revealed several anomalies, which prompted AFIP to contact these taxpayers in order to get clarification.

In addition, the AFIP sent notifications to approximately 3,997 crypto holders in Argentina. Consequently, these taxpayers need to rectify these inaccuracies in accordance with the cryptocurrency holdings they have. In that case, they will be required to pay additional taxes.

In addition, AFIP connected the warning to the tax returns that these cryptocurrency holders had submitted in the year 2020. The concerned taxpayers had carried out their transactions by using regional cryptocurrency exchanges.

In addition, the law of the country mandates that local cryptocurrency exchanges provide operating information to AFIP. The notification states that these taxpayers were involved with cryptocurrency exchanges that were located within the county.

This is what the notice says:

You are now informed that any profits you make through the sale of virtual currencies are liable to be taxed as income. Therefore, you are required to communicate them in the proper paperwork as well as in your holding, if applicable.

However, these taxpayers may be required to provide an explanation for their use of cryptocurrency in the year 2020. As a consequence of this, they would be required to declare their crypto history, beginning with the time they first purchased the digital currency and continuing up to the present day.

As a consequence of this, these taxpayers may need to adjust the cryptocurrency tax payments they made for years before to 2020. However, if these taxpayers fail to pay their taxes, the regulator may be forced to seize their cryptocurrency assets because of their activities. Nevertheless, analysts are of the opinion that the seizure of cryptocurrency in Argentina in order to pay tax arrears is contentious.

AFIP Does Not Possess the Authority to Confiscate Cryptocurrency Wallets

Daniel Perez, an attorney in the country, stated that none of the laws in the country provide the state the authority to seize users' wallets. On the other hand, the tax authority has the power to take control of digital accounts.

Since February, the AFIP has taken control of nearly 1200 digital accounts belonging to individuals who have refused to pay taxes.

In addition to this, Perez said that the laws of the country have to be amended in order to make it possible to seize electronic wallets. Because these adjustments have not been made, the Tax Agency is unable to seize the electronic wallets of tax evaders.

The AFIP is aware of the necessity to amend the tax legislation in the local area. As a result, the organization is attempting to include a language into the Budget. Because of this clause, the agency will have the authority to seize electronic wallets containing crypto and fiat currencies.

However, there is a significant restriction with this new regulation. The agency is only able to seize digital currency that are held in wallets and exchanges that do not provide custody services. Additionally, the authorities of the government are unable to access the accounts of users without the users' private keys. As a result, the agency may have to resort to the use of force in order to obtain the secret keys of tax cheats.


Orizu Ebube

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