El Salvador will exempt foreign investors from taxes on BTC profits
President’s Bukele legal adviser told the AFP the plan to not charge taxes for high profits in Bitcoin
A government adviser shared with news agency AFP that El Salvador will exempt foreign investors from paying taxes on Bitcoin profits.
The country regulated BTC as legal tender on September 7 and it is, step by step, making improvements on laws to accommodate better practices for the crypto circulation.
Javier Argueta, legal adviser of El Salvador’s President Nayib Bukele, said that goal is to encourage foreign investment.
“If a person has assets in bitcoin and makes high profits, there will be no tax”
-Javier Argueta to AFP.
The adviser also stated that this exception will be for either capital increase or income.
Even after the implementation, many critics to the regulation of Bitcoin in El Salvador defend that BTC’s volatility and its potential impact on price inflation, alongside an alleged lack of protection for users and fears over illegal use of the cryptocurrency (for money laundering and other criminal activities) are a danger to Salvadoran’s economy.
But Argueta also weighed in, saying the “Chivo-wallet” - a wallet developed by the government - includes "relevant mechanisms" to ensure traceability in order to prevent those criminal actions.
"We are implementing a series of recommendations from international institutions against money laundering”
As for the volatility and inflation matter, the adviser stated that the government already thought about a solution to minimize the impact of an extreme Bitcoin fluctuation: the BTC transactions would be temporarily halted in case of a possible collapse.
El Salvador’s decision to make Bitcoin a legal tender has been a conversation starter around the world in regard to making cryptos official currencies in one country.
By now, the country’s been adapting through its “Chivo-wallets” and acquiring more BTC in order to support the implementation. Today, El Salvador’s BTC holdings stand at around $24 million.