Argentina requires voluntary disclosure of domestic and foreign crypto assets, enjoying a 5% lower tax rate until the end of March.

Argentina's newly elected president, Javier Milei, proposed a bill this week that requires individuals to proactively report their cryptocurrency assets to the government for legalization, regardless of the assets' origin or where they are held. Those who report by the end of March will enjoy a discounted tax rate of 5%, which will increase to 15% thereafter.

Declare Cryptocurrency Assets by End of March to Enjoy 5% Lower Tax Rate

During his campaign, Milei praised Bitcoin (BTC), and the crypto community has had a positive attitude towards him for winning the presidential election in November. However, shortly after the introduction of his comprehensive bill on Tuesday, the country faced strong opposition and protests.

According to a report by CoinDesk, the asset regularization plan is part of Argentina's proposed wide-ranging economic and political reforms. Cryptocurrencies are one of the assets under the proposed regulatory regime, and regardless of their source or location, individuals are required to voluntarily declare them to the government. Those who declare their cryptocurrency holdings before March 31 will only be subject to a tax rate of 5%, which will increase to 15% by November 30.

According to the draft of the bill, these incentives apply to "cryptocurrencies, crypto assets, and other similar commodities, regardless of their issuer, owner, or where they are stored, kept, or stored."

Argentine Peso Depreciation, Legalization of Cryptocurrency Boost Tax Revenue?

According to a report released by Ark Invest in August, Argentina's soaring inflation and the presidential candidate's support for Bitcoin are continuously driving the adoption of Bitcoin in the country.

Shortly after taking office, Javier Milei announced a series of radical economic shock therapies, not only devaluing the Argentine peso by more than half but also freezing all public works, cutting government spending, and so on, leading to public protests expressing dissatisfaction. Milei, who once supported abolishing the Argentine peso and advocated for economic "dollarization" before the election, seems to have abandoned this path but allows contracts to be signed using Bitcoin and other cryptocurrencies.

The draft bill introduced this time seems to intend to include cryptocurrencies in the asset regulatory system, legalize them in Argentina, but the first step in legalization is taxation to drive tax revenue, which is likely to provoke strong opposition from the people.