Buenos Aires Adds Cryptocurrency Mining as Taxable Activity

The Buenos Aires province in Argentina gave the go-ahead for a plan to include crypto mining as a taxable activity for the upcoming calendar year. 4% of the revenue generated by these operations will be required, according to a document presented by the province’s governor, Alex Kicillof, for the activity formally referred to as “Processing and validation services for crypto assets and/or cryptocurrency transactions (crypto asset and/or cryptocurrency mining)”

In the document, presented by the governor of the province, it establishes the “Processing and validation services for crypto assets and/or cryptocurrency transactions. However, it is yet unclear if Crypto Staking will be subject to taxation.

The taxes would be paid to the government of the province, and would not be related to any other taxes established by the Argentine national government. The document further clarifies that this tax will apply only when the hardware used to deploy this activity is located in the province’s jurisdiction.

This tax regime will begin to be applied in January, but there are still some elements undefined around the implementation of this new tax.

Doubts Remain

The doubts that analysts have about the application of this tax are related mainly to two areas. The first one has to do with the definition of the equipment that will be taxed. If the approved documents refer only to proof-of-work hardware, only ASIC miners and graphic cards will be considered for these taxes. However, if computers running staking nodes are also considered part of this hardware, staking could also be taxed.

Further, Marcos Zocaro, an Argentine accountant, has questions about the price at which the mined (or staked) cryptocurrencies will be taxed. The document states that these crypto assets will be taxed at “official or current value in place,” but fails to define the source of these values that vary from exchange to exchange. It is also unclear if this value will be calculated when the cryptocurrency is mined, or when the tax period is finished.

#Criptoactivos #Minería#IngresosBrutos #ProvinciaBuenosAires
Se aprobaron modificaciones a IIBB en la PBA que alcanzan a la “minería” cripto. (Aún no publicadas en el Boletín Oficial de la PBA)https://t.co/CpZWpWwrzi
Veamos de qué se trata.

— Marcos Zocaro (@MarcosZocaro) December 20, 2022

In April, Buenos Aires announced it would allow users to pay taxes with crypto this next year. The city also has a project to use a blockchain ID system and will host Ethereum nodes as part of its digitization and modernization push in 2023.

Bitcoin miners in Argentina are capitalizing on the inefficiencies of the country’s interventionist economy to reap outsize returns, fueled by memories of currency busts and powered by government-subsidized electricity.

The taxes would be paid to the provincial government and would not be related to any other taxes levied by the Argentine national government. According to the paper, this tax will only be levied in cases where the equipment used to carry out the operation is located inside the province’s borders.

The use of this new tax system will begin in January, but some details of its implementation are still up in the air. This means that crypto investors or traders in the city will stay away from any crypto mining to avoid getting taxed.