Taxation of Bitcoin investments is required

September 1, 2021

Fidel Ortiz, the chief executive officer of the firm FIXAT, commented for the “ABC” website that in 2020 there was a growth of up to 300% regarding investments in Bitcoin and warned that its treatment is not regulated by the tax entity. Therefore, it is easier to incur a tax omission on profits.

1. Pandemic Impact

According to Ortiz, the annual performance of Bitcoin (hereinafter BTC) recorded a high range of investment with the development of the Covid-19 pandemic during 2020, which in several cases were higher operations than those made with traditional assets, such as gold. Due to this, BTC grew by about 50% compared to the 25.6% increase generated by gold during that year.

2. How Cryptocurrencies Work

The expert explained that BTC is a virtual currency yet controlled by any government or bank, so many countries do not have any particular regulation for its operations. However, the profit yields of these subjects should be subject to taxation since they meet the minimum requirements to apply to tax collection.

Finally, the expert commented that if the taxpayer omits to declare his investments in BTC, the tax administration will detect a tax discrepancy as there is undeclared income, which may lead to penalties, depending on the corresponding amounts.

Source: Abc 31/08/21