Chilean Taxpayers Asked to Report Crypto Profits

In the latest cryptocurrency news, Chile is reportedly looking to start taxing for all digital currencies this April. The latter is basically the month when taxpayers pay their annual income taxes. The only catch, however, is that the rate still remains uncertain.

Inclusion of Digital Currencies

According to the official report, the country’s revenue authority has recently included all digital currency assets in the Annual Income Tax Returns form. The document is will be used in declaring as “other own income and/or third-party income” from businesses that state their effective income.

Chile basically exempted cryptos from last year’s Value Added Taxes, suggesting that they were deemed “intangible assets.” But unlike in the past, investors will be required to pay tax on all earnings specifically generated from cryptocurrency-related investments. The announcement was made official by the country’s very own Internal Revenue Service.

Unfortunately, though, there is a specific area that remains unclear. Right now, there is no certain amount or figure that describes the rate the digital currency tax will be levied. But as far as individual income tax thresholds in Chile are concerned, they are believed to have averaged 39.83 percent. And this is particularly during the 15 years to last year. As of press time, the rate went down to 35 percent.

Tracking Crypto-Related Activities

According to Fernando Barraza, the director of the country’s revenue authority, people who sell, trade, or buy cryptocurrencies will have to register their businesses. The process can be completed through what is called a “tax-exempt invoice.”

Barraza clarified that this invoice gives the Internal Revenue Service the ability to monitor all of their operations. The official reported further suggested that the country’s government had become interested in tracking all digital currency-related activities, especially after the significant rise in their use. It is worth noting that there is currently an existing boost in crypto utilization since they are now considered “valid currencies” in trading and/or buying products and services.

A Huge Step

For many observers, the decision from the revenue collector is a huge step towards legitimizing the trade and use of cryptos in the country. Until now, the legal status of digital currencies has remained a conjecture matter. To put it simply, the country has yet to recognize cryptocurrencies like Bitcoin as a legal tender, though they are not considered banned.

However, the country’s cryptocurrency exchanges last year experienced some running battles with a lot of commercial banks. The latter had chosen to close their accounts even without giving any explanation.