El Salvador has announced that foreign bitcoin investors will not have to pay tax on the profits they make through cryptocurrency transactions.
El Salvador Makes Things Easy for Foreign BTC Investors
The news comes just a little over a week after the Central American nation declared bitcoin legal tender. El Salvador is the first nation to make such a move, and now it looks like several others – such as Paraguay – are interested in following in the country’s footsteps.
Government advisor Javier Argueta says that this is likely a move to encourage foreign investment in the country. In a recent interview, he states:
If a person has assets in bitcoin and makes high profits, there will be no tax. This (is done) obviously to encourage foreign investment… There will be no taxes to pay on either the capital increase or the income.
While there are steps in place designed to increase investment in El Salvador, Argueta – who also serves as a personal advisor to president Nayib Bukele – says that there are also measures being instilled to ensure that none of the foreign investments are illicit, and that money laundering does not take place within El Salvador’s borders.
We are implementing a series of recommendations from international institutions against money laundering.
The road to bitcoin legalization in El Salvador has not been an easy one. The nation initially sought the help of major institutions such as the World Bank to implement its bitcoin agenda. The Bank ultimately said “no,” deciding that bitcoin was too risky and volatile. El Salvador then decided to move forward on implementing a digital future without assistance.
The country even built a whole new digital wallet system known as “Chivo,” which is slang for “cool” in the country. The wallet was designed to assist citizens interested in trading bitcoin learn about the world’s number one digital currency by market cap. It even gifted many eligible traders with approximately $30 in BTC to help them get started.
BTC Doesn’t Intrigue Anyone
However, there were several individuals heavily opposed to the bitcoin agenda that El Salvador is so adamant about instilling. Protests have been forming in the country’s capital of San Salvador over the past several weeks, with people holding up negative signs and honking bullhorns to state that they are “just fine” when it comes to using the U.S. dollar, which is the currency that El Salvador has been reliant on up until this point.
Bukele has since come out to let people know that bitcoin is not being forced up on them. They simply have the option of using it should they so choose. He says that bitcoin is being adopted primarily to ensure that remittance payments become easier for people sending money home to their families while working abroad in the United States.