El Salvador: BTC tax exemption for foreign investors.

Foreign investors are going to be excused from paying any taxes on the profits they make on bitcoin holding. This comes as speculation from within the parliament. It became the first country in America to take the initiative of recognizing cryptocurrency as a legal tender.

El Salvador came out as the first country to accept Bitcoin as a legal tender, alongside dollars, which has been the official currency for 20 years. Moreover, under this new reform, all local businesses must accept BTC as a legitimate mode of payment. Since then, the crypto world has gone haywire with excitement, and to add to this, the government of El Salvador has exempted capital gain tax and income tax on Bitcoin, as known from the statement of a presidential legal counsel.

Therefore, this is a move primarily to attract foreign investments. Agency France-Press reports on September 10th that Javier Argueta, a legal advisor of President Nayib Bukele, has made a statement:

“If a person has assets in Bitcoin and makes high profits, there will be no tax,” says Argueta. Thereafter, adding that El Salvador will impose no taxes on “either the capital increase or the income.”

Conclusion

Experts have highlighted the volatility of cryptocurrency time and time again. We have to see how it pans out for countries with high poverty and unemployment quotient. There are also fears about its potential of its use in illegal activities. But Argueta has been saying that the cyber “wallet”, that is helping people buy and spend bitcoins very easily. This includes “relevant mechanisms” to ensure traceability. 

“We are implementing a series of recommendations from international institutions against money laundering,”

The government is hoping this will go a long way to establish them in the crypto world and leave a mark.