Argentinian Tax Authority, AFIP has said that they are able to take any digital assets owed by taxpayers if there is not a settlement of tax debts. The organization had recommended that the law be passed last year but it was not implemented until the Covid-19 pandemic.
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Now, the organization can confiscate digital assets stored in such accounts using a formal procedure. The addition allows authorities to access bank accounts, loans from third parties and houses or cars that are owned by people who could be connected with cryptocurrency transaction history – even though they may have made these purchases many decades ago. Local media were told by official sources that:
The development of electronic means of payment and their widespread use explains the agency’s decision to include digital accounts in the list of assets seized to collect debts.
If the law applies, financial institutions will have to give up customers’ information. The Argentinian Tax Authority has announced that they will confiscate 9800 taxpayers’ digital accounts.
A Cryptocurrency-Based Tax Collection Process
Argentina’s tax authorities are going after digital wallets that handle the national fiat currency, such as Bimo and Ualá. Mercado Pago is the most significant target of these tax authorities. This e-commerce platform has bitcoin-friendly policies that allow debtors to save their money from annoying collectors.
When a person or company owes taxes, it’s not just their digital wallet that the organization will target. The first is to seek liquid alternatives such as cash. After these funds have run out, the company will turn its attention to investments in cryptocurrency.
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The government of Argentina takes a very strict approach to cryptocurrency. In a recent interview with local media, SDC Tax Advisors’ Sebastián Domínguez confirmed that they could confiscate even cryptocurrencies if the custody of these assets depends on an entity based in Argentina.
He explained;
Although the novelty of this procedure points out that digital wallets were targeted due to growth, it does not necessarily mean that other assets are immune to potential embargoes.
What is the AFIP?
The Argentinian federal tax authority is the AFIP. It has full discretion to inspect any taxpayer’s return during its limited time frame.
The AFIP is responsible for overseeing the accuracy of one’s tax returns. The individual could be audited at any given time. It may also happen in different ways.
Different methods are used by the government to collect taxes. The government might use a database to check your income. If there is enough evidence suggesting you’re hiding something, then all bets are off as far as return visits go. Random sampling is another method. The inspector may also visit for fun or to conduct computerized screenings.
The Argentinian Tax Authority is able to issue information requests to any sector of the country. Expect a reply within fifteen days after being notified.
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