See More

El Salvador to Establish Bitcoin Tax Exemptions for Foreign Investors

2 mins
Updated by Kyle Baird
Join our Trading Community on Telegram

In Brief

  • Foreign investors will be exempt from taxes on bitcoin profits, says the government of El Salvador.
  • A government official has stated that, “If a person has assets in Bitcoin and makes high profits, there will be no tax."
  • It remains to be seen how the change will proceed in the medium and long term.
  • promo

Foreign investors will be exempt from tax on their bitcoin profits in El Salvador, according to a legal adviser for the government.

The government of El Salvador has said that foreign investors will be exempt from taxes on bitcoin profits. A government adviser disclosed the information on Sept 10, which is a development that further incentivizes entrepreneurs and investors to enter the nation.

Speaking to AFP, Javier Argueta, legal adviser to President Nayib Bukele, said,

“If a person has assets in Bitcoin and makes high profits, there will be no tax. This (is done) obviously to encourage foreign investment.”

Argueta also said that the country was working with international agencies to implement compliance measures. Global bodies like the International Monetary Fund (IMF) have highlighted traceability and the prevention of illicit financial activities as key worries.

The ratifying of bitcoin as legal tender, though still in its early days, is proving to be somewhat problematic for the country. There has been criticism from all sides, from the opposition party to global bodies across the world. But the government has not trudged on, undeterred by this resistance.

The Chivo Wallet, which is El Salvador’s official bitcoin wallet, was launched on Sept 7, with $30 in BTC offered for first-time users. The government bought 400 bitcoins to prepare for the change, which has to be said isn’t going perfectly.

It remains to be seen how the change will proceed in the medium and long term. Critics have listed a number of issues, with volatility being the number one concern. The country’s internal ministers have drawn attention to this, saying that salary payments could be affected by the volatility.

El Salvador bitcoin adoption filled with ups and downs

The general consensus is that the El Salvador decision is one that has been a rollercoaster ride for the country. This is a first-of-a-kind move for bitcoin, and many are curious to see how it will play out on such a large scale. The upcoming 12 months will be instrumental in seeing how bitcoin plays a role in the local economy.

Those inside the cryptocurrency world have offered their own take on the matter. Charles Hoskinson, CEO of Input Output Hong Kong (IOHK), said that every country needs a bitcoin strategy. He praised El Salvador’s decision, and went so far as to say that there is “nothing in human history that has grown that quickly.”

But of more concern is the fact that citizens are taking to the streets to protest the move. The wallet appears to be working as intended, though there have been some hiccups with ATMs. One citizen group has also filed a lawsuit against the government, which is the most severe move yet.

Top crypto projects in the US | May 2024



In adherence to the Trust Project guidelines, BeInCrypto is committed to unbiased, transparent reporting. This news article aims to provide accurate, timely information. However, readers are advised to verify facts independently and consult with a professional before making any decisions based on this content. Please note that our Terms and ConditionsPrivacy Policy, and Disclaimers have been updated.

Rahul Nambiampurath
Rahul Nambiampurath's cryptocurrency journey first began in 2014 when he stumbled upon Satoshi's Bitcoin whitepaper. With a bachelor's degree in Commerce and an MBA in Finance from Sikkim Manipal University, he was among the few that first recognized the sheer untapped potential of decentralized technologies. Since then, he has helped DeFi platforms like Balancer and Sidus Heroes — a web3 metaverse — as well as CEXs like Bitso (Mexico's biggest) and Overbit to reach new heights with his...