Foreign investors will not pay income tax on bitcoin in El Salvador

The government will be able to track transactions in bitcoin thanks to a “tracking mechanism” for crypto wallets, said an adviser to the country’s president.

El Salvador’s authorities will exempt foreign investors from income tax on transactions in bitcoin. Javier Argueta, legal adviser to the country’s president, told AFP news agency about this.

“If a person has assets in bitcoin and they generate a lot of profit, they will not be taxed,” he said. Capital increases in bitcoin will also not be taxed, Argeta noted.

El Salvador’s government legalized bitcoin on September 7. Critics of this measure believe that the cryptocurrency is too volatile and could cause inflation to rise. Residents of El Salvador are worried about a possible increase in corruption amid the spread of cryptocurrencies. The authorities of other countries fear the use of bitcoin in money laundering and terrorist financing.

In response to these objections, the presidential adviser said that the crypto wallet in El Salvador will have “appropriate tracking mechanisms” for the transaction.

Read also: the widespread use of cryptocurrencies contributes to the growth of organized crime, according to the British regulator.

Argeta also said that Bitcoin operations would be temporarily suspended if its value plummeted. Recall that on the day of the legalization of cryptocurrency in El Salvador, the bitcoin rate fell by 8.5% per day. At the time of publication, the token is trading at $ 44,000 and has not yet recovered to its price on September 7.

Source: Coinmarketcap

In August, the US Senate considered an amendment to the cryptocurrency law. According to this amendment, miners, developers and other participants in the crypto industry were exempted from tax reporting on cryptocurrency. The Biden government plans to tighten tax regulations on the cryptocurrency market by 2023.

The Russian tax service insists on the mandatory declaration of cryptocurrencies by Russians. Regulators believe that citizens should report on transactions with digital assets if their volume for the year exceeded 600 thousand rubles.

Read also: Aksakov suggests equating cryptocurrency mining with entrepreneurship.

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