"Chile and crypto taxes"
Updated: Feb 14, 2022
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 it was a surprise to find out about it. 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 de Impuestos Internos (SII).
It appears that the high earnings on cryptocurrency in 2017 woke everyone up in Chile, and all of a sudden many realized either I’m going to read about, invest in it, or collect taxes on it.
According to Latercera.com, our current Chilean tax norm scarcely refers to 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. This is similar to what the Central Bank of Chile proposed at the time since if they did recognize them, they would require legal recognition as such.
Because cryptocurrencies are not considered under the Chilean legislation as 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, and he said, "The income law is very broad to define what income is, stating that it is any type of increase in equity." According to the 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, whether in Chile or abroad." However when it comes to Value Added Tax, cryptocurrencies "lack corporality", thus, they are not subjected to it.
Game over! At some point during this year, the SII authorities will have more information about these new crypto taxes, and in 2019, the Chilean rent operation will be the first one in which there will be taxes on digital money.
On my next blog, I will be writing about crypto and banks in Chile. Recently, there have been lots of news about them ever since two Chilean banks banned two companies due to their associations with cryptocurrency.
Hoped you enjoyed it! Feel free to comment.