"Chile and crypto taxes"
Updated: Apr 20, 2018
I’ve written about crypto taxes in the United States and now it only makes sense to talk about what’s going on with this matter in my country Chile. Chile is no exception when it comes to taxes and crypto and I must admit this was a surprise to find out that to me I thought crypto in Chile was still very unknown, and though it might be for many Chileans, this is not the case for our Chilean IRS called Servicio Impusto Interno (SII).
It appears that the high earnings on crypto currency in 2017 woke everyone up in Chile and all of sudden many realized either I’m going to read about, invest in it or collet taxes on it.
According to http://www.latercera.com/negocios/noticia/sii-define-tratamiento-tributario-las-criptomonedas-chile/87129/ our current Chilean tax norm refers very little on the existence of digital currencies, this has made it very difficult to rule on crypto taxes. Regarding crypto, “SII indicates that in accordance with Chilean legislation, they cannot be considered a currency, similar to what the Central Bank of Chile proposed at the time, since to do so they require legal recognition as such”.
Because cryptocurrencies are not considered under the Chilean legislation as a fiat cash SII defined cryptocurrencies as "monetary assets agreed between individuals". This means anyone who earns income with crypto has the obligation to declare the earnings they have received.
The Chilean newspaper La Tercera interviewed Javier Jaque, an EY Tax Consultancy partner "the income law is very broad to define what income is, stating that it is any increase in equity”. According to our SII, a cryptocurrency enters that lien, and must be declared as any other income.
Another interesting point is that SII indicates that "Any person domiciled or resident in Chile for the purpose of income tax must consider and declare all their earnings, returns and profits whatever the place or amount of their generation, in Chile or abroad”, but when it comes to Value Added Tax cryptocurrencies "lack corporality", will not be subject to it.
Game over, at some point during this year the SII authority’s will have more information about these new crypto taxes and, in 2019 the Chilean rent operation will be the first-time there will be taxes on digital money.
On my next blog I will be writing about crypto and banks in Chile, recently they have been making lots of news, ever since two Chilean banks banned to companies for having association with cryptocurrency.
Hoped you enjoyed it, feel free to comment.