by Sergio Goschenko
The Argentine Tax Authority (AFIP) is ramping up its fight against cryptocurrency-related tax evasion. On Oct. 28, the organization informed it had sent notifications to 3,997 taxpayers about incongruencies between their tax statements and reports on their cryptocurrency holdings. These statements being reviewed correspond to reports of operations happening in 2020.
The Argentine Tax Authority (AFIP) is using the reports coming from local exchanges to cross the data in the tax statements and the crypto holdings of several taxpayers and has already found incongruencies. According to reports, the organization has already sent notifications of these problems to 3,997 Argentine citizens, that will have the opportunity to correct their statements to include their cryptocurrency holdings and pay additional taxes.
These notifications would be linked to statements that were filed during 2020 and would be sent to taxpayers that have operated using local cryptocurrency exchanges, that must pass their operational information to the AFIP by law. The notifications explain that the taxpayer has been operating with cryptocurrency in these exchanges. It continues declaring:
You are reminded that the results derived from the disposal of digital currencies are covered by the Income Tax and, if applicable, you must proceed to externalize them in the relevant affidavits as well as their possession.
However, asking for information and justification of the expenses and cryptocurrency purchases for taxpayers in 2020 might lead them to show the history of their cryptocurrency holdings since its purchase until that year. This might also derive from having to amend cryptocurrency statements of years before 2020.
These actions can lead to a possible seizure of bitcoin, which is still a controversial issue according to analysts. Daniel Perez, an Argentine attorney, believes that there are still no laws that allow the state to take control of these cryptocurrency wallets. In contrast, digital accounts can be seized, with the organization having seized more than 1,200 of these since Feb. In an interview with Iproup, he stated:
The law would have to be modified to clearly stipulate the possibility of seizing electronic wallets. The AFIP knows this, and that is why it is trying to sneak into the Budget an article that gives it the power to do so both with respect to fiat money and bitcoin.
The applicability of this new article would be also limited because it would only apply to cryptocurrency held in noncustodial wallet providers and exchanges. It is still uncertain the ways in which the state would force citizens to deliver their cryptocurrency private keys to government officials.
What do you think about the recent notifications sent to taxpayers by the AFIP? Tell us in the comments section below.
Sergio is a cryptocurrency journalist based in Venezuela. He describes himself as late to the game, entering the cryptosphere when the price rise happened during December 2017. Having a computer engineering background, living in Venezuela, and being impacted by the cryptocurrency boom at a social level, he offers a different point of view about crypto success and how it helps the unbanked and underserved.
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