Venezuela is one of the countries that have embraced cryptocurrency and blockchain technology. So far, the government-backed digital currency has helped the country resolve some of the problems caused by the high inflation rate.
New Tax Payment Rules for Crypto Users
On Monday 31st, the Venezuelan government published an official gazette No. 6,420 dated 28th December 2018. The Gazette notice provides information about the proposed new tax payment rules for crypto users in Venezuela As reported online, the decree which was signed by President Nicolas Maduro states that all Venezuela citizens who do business in foreign currencies and digital currencies will be required to pay taxes to the government using the same currency.
This means that all crypto users will be required to pay taxes using their digital assets and not in bolivars. The decree also stated that the Venezuelan citizens are facing severe challenges due to the deterioration of the economy. As a result, government officials resolved to come up with sufficient measures that will improve and strengthen the current fiscal regime.
The Ministry of Popular Power of Economy and Finance was tasked with the mandate of implementing the new tax rules. Just like any other tax regulation in other parts of the world, the new payments rules have two exemptions. Transactions done for export of services and goods processed by public entities and securities traded on any of the accredited stock exchange are exempt.
In other news, Maracaibo Municipality in Zulia state has announced that it will start using the Petro, the government-backed cryptocurrency, to calculate the business tax. Before this announcement was made, most of the business owners were confused because they thought the rule meant that non-crypto users would start paying business taxes using Petro.
Other government officials from the ministry also stated that taxpayers in Venezuela who are yet to invest in cryptocurrencies would not be required to pay taxes in Petro. Concisely, the government intend to use the value of petro on the exchange platforms as a reference unit when calculating minimum tax under the current economic unit that is still stipulated in the percentage of gross income.
The government also clarified that Petro, the national cryptocurrency in Venezuela, has two distinct but related values. As a cryptocurrency and as an asset that is converted into 9,000 sovereign bolivars. The latter amount is used to calculate current salaries for employees and new passport application fees.
Finally, the next tax payment rules for crypto users in Venezuela states that payment of taxes will be carried out based on the economic activities of each micro business or company. Therefore, if a business that is registered and licensed to operate in Venezuela did a transaction using petro or any other cryptocurrency such as bitcoin; they will be required to declare their income using that specific digital currency. Click here for more daily cryptocurrency news here.