Friday 8, April 2022 15:23 Hrs
In Chile, digital currencies are considered a tradable good, so they must be taxed. But how to do it and what advice do the experts give? Here we explain all the details. What the SII says
Contrary to what many believe, profits from buying and selling cryptocurrencies do pay taxes, as do all financial investments.
Given this, the Internal Revenue Service (SII) says that “natural persons, who do not have assigned cryptocurrencies to their individual company, are taxed for the highest value obtained in the disposal of digital assets.”
The SII, in addition, states that to determine the highest value, “the tax cost of the respective cryptocurrency will be deducted from the disposal price.” This means that this cost “will be made up of the acquisition value of the respective assets, duly readjusted according to the percentage of variation experienced by the CPI between the month prior to the acquisition and the month prior to the sale”.
But what does that mean? Here we explain the details. Everyone must declare
There are currently eight complementary global tax brackets, ranging from 0% to 40%. Therefore, if a person obtained during 2021 income up to $ 8,775,702 he would be exempt from paying taxes. If he received more, he would have to pay taxes. However, everyone must declare.
It is important to specify that cryptocurrency markets (such as Buda and Orionx) are obliged to inform the SII regarding all the operations carried out by their clients. But that doesn’t mean the company files taxes for the user. That is an individual responsibility.
“If they have invested in Chilean platforms, they must enter through the same page of the SII and go to the option ‘withholding agent Tax Year 2022’. In this section you will find the Affidavit 1891 and you will be able to visualize all the purchases and sales you have made regarding cryptocurrencies, “explains Diego Ramírez, accountant and collaborator of Nubox.
If you don’t understand much so far, perhaps this example from Cristóbal Pereira, CEO of LatAmTech Finance, will help you: “If you bought $ 100,000 in cryptocurrencies in January 2021 and sold them in November for $ 150,000, you had an increase in equity of $ 50,000, so that profit is added to all your income obtained during 2021.”
Continuing with the example, the expert states that “it is necessary to take that $ 100,000 from January and adjust it to the CPI to take it to December 2021. The same must be done with the sale of $150,000. Then, you must take out the difference and add that amount in box 1032 of line 10 of Form 22 of the complementary global tax.” Beware of gifts
There are a number of elements that must be taken into account when making the income statement. “The key will be to know the tax situation of each person, because someone may have sold a cryptocurrency or also have paid for a service, which has a tax impact,” recommends Paulo Parra, country manager of Satoshitango Chile.
For his part, Pereira indicates that it is also key “to review the records of purchases and sales that were made in each exchange. For that it is advisable to download the information directly from those platforms so that the corresponding calculations can be made.” He adds: “If you received an airdrop (a gift or payment in a digital currency), these are considered 100% income.
If you think it’s a lot of information, there are a number of platforms that carry out these procedures.
KryptoLedgers is a Chilean software that carries out calculations automatically and gives you the value you should add to your statement. It has a free version and two paid versions. In addition, it offers a number of benefits with some digital currency exchanges.
For his part, David Ancelovici, tax lawyer at Albagli Zaliasnik and legal consultant for Orionx, says that “it is always advisable to have the advice of a professional when filing taxes, especially when Form 22 must reflect transactions associated with crypto assets whose regulation is in full development.” In short
According to Buda.com if you are in any of these five cases, you will have to pay taxes:
– If you alienated cryptocurrencies for money in local currency and got a profit.
– If you paid for goods and services with cryptocurrencies.
– If you were paid in cryptocurrencies.
– If you received mined cryptocurrencies.
– If you donated cryptocurrencies to an NGO.
Originally posted 2022-04-27 00:03:35.