Cryptocurrencies and tax policy

Almost 3 years after the Chilean tax administration –Servicio de Impuestos Internos (SII) - issued instructions for the first time on the taxation of profits derived from cryptocurrencies in its Official Letter No. 963 of 2018, it is perhaps today when it takes on greater importance and relevance of this issue given the boom that Bitcoin has had as a result of its greater recognition by various institutions, reaching prices of US $ 50.000 per unit, becoming the favorite currency of regular investors, some of great renown such as Elon Musk, bringing the investment world to many newbies.

The SII established the basic guidelines for the treatment of cryptocurrencies, defining them of an intangible nature as digital or virtual assets, leaving aside the current that indicates that it is legal or foreign currency. This is relevant because, on the one hand, it makes the income tax applicable to the profit derived from cryptocurrencies and, on the other, it excludes the taxation of value added tax (VAT), without prejudice to the commissions being taxed with said tax due to intermediation activities in this type of operations (wallet providers or exchanges).

The Organization for Economic Cooperation and Development (OECD) has recently published the report "Taxing Virtual Currencies, an Overview of Tax Treatments and Emerging Tax Policy Issues", in which it warns of its concern about the lack of tax regulation in this type of tax. operations. The report notes that the implications for tax policy and evasion have been largely unexplored, which is why it establishes a series of recommendations for regulatory authorities, including establishing a common regulatory framework for cryptocurrencies, that there is equal treatment to other assets, promote tax compliance in cryptocurrencies and establish exemptions for those who operate occasionally.

Now, in this highly developed world of cryptocurrencies and considering the lack of specialized regulation in Chile, it is worth wondering how the SII can be adjusted with legal and technological tools to be able to develop an effective control over all actors, miners, platforms sale and related services that operate within the cryptocurrency trading chain.

It is clear that due to the open nature, in many anonymous and global cases of cryptocurrencies, it is extremely difficult to carry out an audit of said assets without specialized regulation and centralized control bodies for the cryptocurrency market, which is why it is urgent to address this issue within the discussion of tax policies in our country and, especially, in the draft National Policy on Artificial Intelligence proposed by the Government in December 2020.

*The opinions expressed in this article are those of the author and do not necessarily reflect the views of the administrators of The Crypto Legal blog or the Lawgic Tec association.

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Lucas de la Cruz Serrat
Lucas has more than 3 years of experience in highly complex litigation in the public area. In addition, he has diplomas in public procurement from the Pontificia Universidad Católica de Valparaíso and a Diploma in Taxation from the Faculty of Economics and Business of the University of Chile. Lucas has a degree in Legal Sciences from the University of Valparaíso.


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