Argentina: Taxing Crypto Assets: Is the Law Always a Step Behind?

Ruling 2/2022 by the Argentine Federal Tax Authority (AFIP) reinterpreted existing legislation to hold cryptocurrencies subject to personal property tax. Does this make sense? Can the government and the taxpayer agree on when and how to calculate the tax? 

How Crypto is Taxed Globally

As investment in cryptocurrencies grows, governments have responded in wildly different ways. In late 2021, El Salvador became the first country in the world to recognize Bitcoin as legal tender. Meanwhile, China has banned all crypto transactions and services, and India has imposed a 30 percent tax on profits from cryptocurrency trading.

Argentina took its own tentative step toward regulating crypto last year, when the Federal Tax Authority issued Ruling 2/2022. Meanwhile, the Province of Buenos Aires and other local taxing authorities have declared transactions involving crypto assets as taxable activity for ingresos brutos (GST or turnover taxes). In each case, the taxing powers consider cryptocurrencies to be non-traditional financial assets based on blockchain technology, defined as an electronic notation that represents a certain amount of money. Thus, these assets are subject to taxation.

Taking a closer look at these efforts and their consequences, it’s worth asking: Is the ability to tax these deregulated transactions just wishful thinking on the part of governments?

Classifying Crypto Assets for Taxation

The Federal Tax Authority defines cryptocurrencies as representing a specified sum of money. Yet this characterization is dubious because cryptocurrencies do not necessarily entitle the bearer to a certain sum. In some situations that might be the case, but not always. Even a relatively stable crypto asset like Bitcoin fluctuates in value, depending on the rules of supply and demand. Unlike securities and other intangibles, these crypto assets are more akin to business goodwill, intellectual property, or contractual rights, all of which are exempt from personal property tax.

To better evaluate the Federal Tax Authority’s efforts, we might classify crypto assets among three main groups:

  • Cryptocurrencies 

Cryptocurrencies are used to make payments or are traded as a store of value. We can further categorize this group into “stable” and “non-stable” payment tokens. Stable tokens seek to maintain a parity in value with another asset (e.g., a precious metal or a government currency). Some stable tokens peg to the U.S. dollar, meaning—at least in theory—that for each token, the issuing entity should have a like number of dollars deposited. Non-stable tokens (among them, Bitcoin) do not reference another asset and their value depends solely on supply and demand.

  • Utility Tokens

Utility token give access to the use of a good or service, for example, a nonfungible token (NFT) that provides the holder access to an event or possession of a digital item.

  • Security Tokens

Security tokens represent marketable securities, including stocks, bonds, or financial trust certificates.

While the Federal Tax Authority attempts to build the case for taxation, no specific regulation offers guidance on how to tax crypto asset transactions.  Holders of these assets should pay taxes, but it should be clear to both the government and the taxpayer when a taxable event occurs and how to calculate the tax upon its occurrence.

Different types of crypto assets should have specific rules to determine the occurrence of the taxable event. Security tokens may be similar to any other marketable security and, therefore, subject to the personal property tax. Nonetheless, a cryptocurrency—particularly a non-stable coin—that does not give the holder the right to a specified sum of money, should be considered an intangible asset and not taxed according to current regulation.

Reporting Crypto Assets for Tax Purposes

The Federal Tax Authority, through its release of General Resolution 4614/19, introduced a reporting protocol for payment processors and virtual wallets, as well as persons acting as intermediaries of accounts, investment, and financing.

According to the resolution, these persons are required to report crypto asset holdings and cryptocurrency movements. For now, the resolution and the reporting protocol apply only to local players like Mercado Pago, Ualá, Ripio, and SatoshiTango.

Foreign companies such as Binance and Coinbase that operate in the same space but without an Argentine subsidiary or branch do not fall within the scope of the resolution. They are therefore not required to report activities to the Federal Tax Authority.

Final Considerations on Taxes and Crypto

More than six months after issuing its opinion, the Federal Tax Authority has limited its action to giving detected holders of crypto assets formal notice of their obligation to comply with income reporting and tax payment rules. This action has further driven Argentine taxpayers to operate through foreign exchanges outside the Federal Tax Authority’s purview.

For any meaningful effort to tax crypto assets, the Argentine Government will need to refine regulations to address the holding and trading of crypto assets. It must also find a more fair and effective way to tax all transactions involving Argentine taxpayers.

Argentina’s efforts to modernize its tax rules to apply to crypto assets is part of a global struggle to reconcile taxation with decentralized financial transactions. How it or any other country decides to regulate and enforce tax rules in this space will be scrutinized, but largely ignored, until there is a uniformity among governments for reporting and taxation.

* * *

Know More

The author, Germán Agustín Hernández, practices in the Tax and Trade group of WSC Legal. For more information on this topic, please contact him at

This article is based on publicly available information and is published only for informational purposes. It is not intended to be legal advice or a thorough analysis of the issues mentioned.