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Tax Authority Identifies Irregularities In Annual Returns Of Argentinian Crypto Tax Filers

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Mar 23, 2023

Argentinian Tax Authority Tightens Annual Statement Scrutiny

Argentinian tax authority namely Administración Federal de Ingresos Públicos (AFIP) had received annual tax returns filed by the national taxpayers.

As per the amended tax law of Argentina, the crypto tax was imposed which was to be implemented in 2022.

Under tax amendment, national taxpayers were advised to include their crypto holdings and income in their annual filings of 2021.

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Under Argentinian tax law, a tax year begins on 1st January and ends on 31st December each year. Resultantly, annual filing becomes due after 31st December of every year.

Scrutiny of Annual Statements by AFIP

The scrutiny of annual statements is taken up by AFIP much later after the submission of statements. It has been often seen that annual filing becomes due but AFIP is still scrutinizing the statements of the previous year.

The same situation occurred when crypto taxpayers filed their statements for 2021. During the scrutiny process, AFIP noticed several irregularities and deficiencies in the annual filings.

It was hence announced by AFIP that at least 184 national taxpayers’ annual statements for 2021 were comprised of irregularities.

Irregularities Identified In At Least 184 National Taxpayers’ Annual Filings

AFIP pointed out that the statements of these 184 taxpayers either deliberately or non-deliberately failed in providing accurate details.

According to an estimate of AFIP, approximately $8 Million worth of digital assets have not been disclosed in these 184 statements.

It has been advised by AFIP that taxpayers shall now pay the difference according to the ‘real estate’ tax provisions. They will have to make the payments or they will be suffering from the consequences.

Possible Causes of Irregularities

According to the information provided by AFIP, irregularities may have been caused intentionally rather than unintentionally.

AFIP alleged that under the existing tax laws, crypto exchanges were required to provide data pertaining to their customers. It was mandatory for them to provide to ensure that each person’s data was provided in a timely manner.

AFIP pointed out the difference between the data collected from exchanges and the data provided by the taxpayers in their annual statements. This meant that the information provided either by one or both sides was incorrect.

Argentinian tax authority pointed out that 184 taxpayers did not disclose the correct information with regard to their digital asset holdings. This was a breach of the tax laws for cryptocurrencies and the people breaching the policy would be held liable for that.

Consequences of Concealing True Information

The authority further noted that some of the taxpayers did not even bother to disclose not a single digital asset in their filings. It warned them that the authority knows how much they have available to them in digital assets.

The taxpayers have been further warned to be subjected to heavy fines and penalties if they further fail in supplying accurate details. In addition to fines, such taxpayers may also be indicted in legal proceedings by AFIP.

In the worst case scenario, the tax authority is also legally entitled to take action which includes amongst others seizing taxpayers’ digital assets.

No Way Out For Taxpayers

There is literally no way out for the taxpayers to skip scrutiny, conceal their digital assets or even provide information in short. They will have to comply with the new law or else they will be facing strict penalties.

Since the adoption of the crypto tax amendment, the law requires locally operating crypto exchanges to supply customers’ data directly to AFIP.

This data includes the names, account name, address, crypto income, expenditure, buying, selling, and the funds lying in a taxpayer’s digital wallet.

Also, transactional data is required by AFIP from the crypto exchanges.

It is because of this tax amendment that several crypto consumers in Argentina started to utilize P2P exchanges. The desired aim behind switching to P2P was to skip reporting to AFIP.

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