Chilean tax bureau requires crypto profits declared

The Servicio de Impuestos Internos (SII), Chile’s tax agency, is now implementing income taxes on profits made from selling cryptocurrencies.

Diario Bitcoin cited local outlets reporting that the SII’s Form 22 will include a new section for other income from companies that do not declare their effective income based on certain provisions in the country’s tax code. Even though not explicitly mentioning cryptocurrencies, the SII had stated late last year that the new section is for income from digital assets.

A May 2018 letter from the SII director had stated that cryptocurrencies were not subject to value-added tax, because they fell under the exempt category of “intangible assets,” but that the agency would require registration of cryptocurrency enterprises.

Chilean banks and cryptocurrency exchanges have been at odds, with the banks claiming the inability of the exchanges to comply with regulations requiring disclosure of personal information from those engaging in cryptocurrency transactions. These exchanges’ bank accounts were closed, prompting the exchanges to file suit.

Last April, the country’s anti-monopoly court ordered for the banks to keep the bank accounts open while a final court decision is pending. This was affirmed by the Court of Appeals in July, but the Supreme Court later said the banks were within their rights to close the accounts. Even so, the anti-monopoly court ratified its decision to keep the accounts open in the meantime.

The country has yet to define the legal status of cryptocurrencies. Last month, Minister of Finance Felipe Larrain stated that his ministry was coordinating with the Central Bank of Chile and the Financial Stability Board in fashioning a regulatory framework. He has also said that the creation of regulations would help normalize the situation between banks and cryptocurrency firms.

Two banks in nearby Brazil have been made to reopen the accounts of cryptocurrency exchange Bitcoin Max, under pain of fines for abusive conduct, wherein the banks had not issued notifications prior to closure of the accounts.