DIAN (the Colombian tax authority) has reminded taxpayers to register cryptocurrencies as part of their financial statements beginning in 2018. Lisandro Junco is the director of DIAN. She reminded users of cryptocurrency that they are subject to tax just like any other asset owned by citizens. Colombia already has $1 billion of digital economy-related taxes.
Colombian citizens must include crypto in their tax statements
Colombia’s tax authorities reminded taxpayers about the obligation to declare cryptocurrency assets on their tax returns starting in 2018. Local media informed the group that the agency is authorized to validate the information received from taxpayers in order to make sure the law of tax compliance has been applied correctly.
Lisandro Junco was the director of Colombia’s tax authority. He spoke out about crypto assets, and how they are taxed in Colombia. He declared:
Taxes must be paid, even though it’s part of digital economies.
The organization also stated that any element meeting the legal definition of assets should be declared. This includes stocks and bonds. Not only crypto users should be aware of cryptocurrency taxation. Because the government has classified cryptocurrency mining earnings as income according to BDO Colombia an accounting firm, cryptocurrency miners should also declare these numbers.
Application and Penalties
Most tax watchdogs depend upon users reporting crypto transactions and holdings. However, Colombian authorities have some tools that could help them detect cryptocurrency tax fraud. Junco explained that DIAN participates in many information exchanges with foreign countries. These include the delivery of names of those citizens who are required to declare crypto-related tax. Junco said:
Then we review what is substantial in the tax return and determine whether there’s room for error, evasion, or if the information is correct.
For failing to declare cryptocurrency taxes in Colombia, the penalties are double what the money is not being included in your tax statement. Junco claims that Colombia collected $1 billion over the three-year period in taxation linked to cryptocurrency.
In order to catch tax evasion quicker, the authority previously revealed a number of measures to increase control over cryptocurrency use.
Let us know your thoughts about Colombian DIAN’s position regarding crypto taxation. Leave a comment below.
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