Argentine authorities have been keeping an eye on Bitcoin mining farms across the country for several months. Some operations have resulted in raids and seizures of equipment, but not really because cryptocurrency mining is illegal in Argentina.
Attorney Fernando Branciforte, who specializes in business and legal relations in the field of cryptocurrencies and blockchain, explained to CriptoNoticias that “cryptocurrency mining is completely legal in Argentina.”
There is no law regulating cryptoassets in the country, despite several plans to do so, no current legislation prohibits mining activity. “According to Article 19 of the National Constitution, everything that is not prohibited is allowed,” the specialist added.
The private actions of men that in no way offend public order and morals, nor harm third parties, are reserved to God alone and exempt from the authority of magistrates. No inhabitant of the nation shall be compelled to do what the law does not command him, nor deprived of what the law does not forbid him.
Constitution of the Argentine Nation, Article 19.
The NGO Bitcoin Argentina has expressed itself in the same vein. As reported by CriptoNoticias in September, the nongovernmental organization issued a release explaining that cryptocurrency mining is not a crime. In addition, they stated that will ask the Argentine government to create a regulatory framework for activity in the country.
Importation of miners, a key issue.
Further explanation, there are factors that can influence the legality of the activity in the country. For example, says Branciforte, “the way the products were imported, how the business is conducted, the declaration of the electricity consumed differing from the real one, the location, etc. These were the reasons for many of the raids carried out in recent months.
How to make sure you have no problems when using imported equipment? Branciforte replied that “the buyer should request the sales invoice from the dealer who delivers it to him and check that it has all the stamps corresponding to the import transaction.”
In case the person wants to import it directly, “he should register as an import agent or use a customs broker to carry out the transaction,” he added.
If a piece of equipment that entered the country illegally is purchased in a store and then is confiscated, the lawyer assures that “with the invoice I will have enough tools to ask the person who sold it to me for all the damages and losses that the situation caused.”
How should I register my bitcoin mining business?
Fernando Branciforte told this newspaper that the Federal Administration of Public Inland Revenue (AFIP) “does not have a category for mining or cryptocurrencies today.” Therefore, he explained, “what is recommended is that the person who starts a mining company classify his or her business in information technology-related activities.”
Similarly, anyone undertaking activities in this area will be obliged to “register with the respective taxes and corresponding municipal permits depending on the location,” the lawyer explained.
Although there is no special register for miners of Bitcoin and other cryptocurrencies in Argentina, yes it will be necessary to analyze the location of the activity “so as not to violate any municipal or provincial regulations,” he added. “As for electricity consumption, it must be done with all the relevant facilities, in order and duly reported to the service provider,” he concluded.
Regarding the latter, he stated. among electricity suppliers, there is no “extraction” category.but there is an industrial or commercial category. “It is in one of these that the miner must register,” he explained.
Bitcoin mining pays taxes in Argentina
Parallel to the legal obligations related to importing and operating bitcoin mining equipment, there are also tax issues to consider. The cryptocurrency mining Is a taxable activity in Argentina.
How explains accountant Marcos Zocaro, When it comes to framing cryptocurrency mining, there are two possibilities From a tax perspective. As a service (the verification of transactions in a network) or as the creation of intangible assets (cryptocurrencies).
As for the application of the first tax to be paid, income tax, it will depend on whether the miner carries out the activity as an individual or as a legal person. Also, will depend on whether he does it for his own account or for a third party. through a mining pool or cloud mining. Depending on the case, this tax can range from 25% to 35% of total profits.
As for the of value added tax (VAT), there are several positions that can be taken.That will depend on each miner’s situation. Mining activity as a service will be covered by this tax. However, if the activity is defined as exporting (which is possible in a globally distributed network), no VAT is due.
On the other hand, mining by an individual can fall under the simplified regime or Monotribute, in which the variables of income and energy consumed are considered. Legal persons cannot participate in this category.
For the purpose of issuing receipts for the profits generated, Branciforte explained, “Cryptoasset is considered an intangible asset, something that has value only when it is entered into the financial market. It is only when the miner converts his cryptoassets into fiat currency that the profit that the law requires to be taxed appears, and it is only then that the business transaction must be recorded.”
Finally, to all this is added the taxation of gross income (which varies depending on the province in which the mining activity takes place) and the derived taxes from the sale of cryptocurrencies, described in previous CryptoNews publications.
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