Venezuela Could Be Hit With the 20% Crypto Tax

Venezuela is a country known for its economic problems and its leaders have been doing everything they can to help bolster its economy. One good example of this is its adoption of cryptocurrency with Venezuela being one of the very first countries to launch its very own cryptocurrency known as the Petro back in 2018. 

New Crypto Law Could take up to 20% in Tax

Crypto users in Venezuela need to know that some of their crypto and foreign currency transactions could be taxed by the government. The government of Venezuela signed a bill that might tax transactions by up to 20%. This rule was instigated to help fight inflationary pressure by their problematic bolivar currency. 

The measures outlined in the bill were passed by the Venezuelan National Assembly. The summary by the draft legislation stated that this new bill aims to create tax targeted at large crypto transactions and foreign transactions. This will ensure that foreign currency transactions and deals regarding crypto assets and cryptocurrencies will be subjected to a tax rate that is equal or greater than what is paid in bolivars.

The lawmakers who created this bill stated that this will create more incentive for people to use its national currency instead of using cryptocurrencies and foreign currency. Criptonoticias stated that at an evening session of the assembly, MPs have approved the bill in their second reading.

With the help of this bill, it will help establish a sliding tax rate for “special taxpayers” who rely on using cryptocurrencies that aren’t recognized by the state. In other words, foreign and crypto-assets. 

The good news for this tax is that it isn’t a 20% rate but it ranges from 2% up to 20% depending on the transaction. “Special taxpayers” are defined as people with an income where they must declare it. 

Criptonoticias also stated that the bolivar, the country’s currency, is less preferred compared to digital assets and foreign currencies like the US dollar. Because of this preference, the country has suffered global inflationary pressure. 

For people using bolivar in their transaction, the bill stated that they will be paying a tax rate between 0% to 2% based on their transaction. This only applies to currencies and cryptocurrencies issued by the state like bolivar and presumably the Petro which is the country’s crypto asset. 

Currencies that don’t belong to this case may be charged somewhere between 2-8% depending on the transaction. And lastly, for currencies that are outside the Venezuelan Banking system like the USD and other crypto assets, they will be charged a rate between 2 to 20% based on the transaction. 

Conclusion

This new Venezuelan bill might help boost their currencies and digital assets. 20% is a huge number especially if you are dealing with large transactions. Hopefully, this will help persuade its citizens to focus more on the country’s cryptocurrency, the Petro, and help boost their economy in the long run.

* We hope this information will help you in your investment process, but this is not investment advice. Every investment carries risk, especially in this industry, so DYOR before making a decision.