Earlier this month, we reported that Chile Is Planning to Use Blockchain to Collect Taxes. Cryptocurrency taxes have seemingly emerged as an important source of revenue for the economy, which is why the government is formulating new plans to organize the tax collection process.
The latest update from a leading Spanish news media outlet claims that the Chilean Internal Revenue Service (SII) has clearly outlined, that Chilean taxpayers must report their cryptocurrency profits to the SII.
It has been described as a mandatory action that people dealing in Cryptocurrency should adhere by.
Back in 2018, the SII had decided that Value Added Tax (VAT) will not be levied on digital currencies. But seeing that they fall into the definition of intangible assets, it was decided that they will still be considered when a person’s annual income tax is being calculated.
This will led to the the first such inclusion of a special section in the income tax form 22, that will be concerned with:
“other own and/or third-party income from companies that declare their effective income and do not declare it to full accounting, attributed…”
This is clearly indicative of the gradual and necessary acceptance of cryptocurrency as a legitimate form of income, which shall be taxable under the law. This signals to the greater willingness of governments to recognize digital currency as not a fad, but a long term asset.
Reportedly, an SII statement was released at the end of 2018, which stated that taxpayers we’re expected and encouraged to report their income from selling foreign fiat currencies and cryptocurrencies in the aforementioned section. Although it hasn’t been explicitly stated in the form, it is clearly understood that the government is taking crypotcurrency taxes, much more seriously than before.
Chilean government has been adopting a cryptocurrency friendly approach of late. That became clear when the Chilean anti-monopoly court granted protection to local cryptocurrency exchanges. They did so by instructing banks to keep the accounts of these exchanges, functional.