An annual inflation rate of 100% is prompting Argentines to increasingly opt for cryptocurrencies.
Bitcoin becoming a haven for Argentines
The latest data points out that Argentina's annual inflation rate surpassed 100% in February 2023, reaching the highest level since the country's hyperinflation in 1991. Bitcoin and other cryptocurrencies have become a haven for Argentines trying to save their assets. However, Argentina's Federal Public Revenue Administration (AFIP) points out that trading between cryptocurrencies and fiat currencies is taxable.
Recently, the AFIP reported that after reviewing the data in the personal assets tax affidavits on the amount of funds these taxpayers have in cryptocurrencies and other assets, the AFIP discovered 184 taxpayers with balances in their virtual wallets that were not included in the personal assets affidavits for the 2021 tax period.
According to the report, the data on cryptocurrency ownership was submitted by the exchanges to AFIP as it requested. The AFIP tax official requires cryptocurrency exchanges to report the number of users, their personal data, the balances of the assets they hold, as well as the monthly operations and movements, the origin or destination account, the monthly amount in original currency and in Argentine pesos.
As a result of the analysis carried out by the specialized areas of the organization, various checks and cross-checks were made on the data with the information available in the AFIP databases, resulting in irregularities in the tax situation of 184 taxpayers, with a total taxable amount of $1.523 million.
While financial experts continue to disagree on the status of cryptocurrencies and their taxation in Argentina, the AFIP is moving forward with the collection of high taxes.