An auditor has warned that Mexicans must pay taxes on commercial profits from bitcoin (BTC) and altcoin – or run the risk of being considered money laundering criminals.
According to the EFE news agency, via El Nacional, Fidel Ortiz, the director general of accounting TO STARE, claimed that BTC investments had surged in 2020 and added that although the sector was largely unregulated, many traders are currently escaping the obligation to pay taxes on their profits.
He said those doing business in crypto should register with tax authorities in an attempt to “avoid being viewed as money laundering.”
The crypto tax is a kind of gray area in Mexico. Although the government and the central bank have not yet taken an official position on the taxation of traders, many tax and legal experts agree that the spirit of the current tax code requires traders to report their profits in as intangible assets. Some claim that the current VAT tax law covers crypto transactions.
And by an article in Lexology from the Guadalajara-based law firm Ramos, Ripoll and Schuster, âMexico does not have a specific fiscal framework for cryptocurrencies. However, it is expected that there will be one in the future.
The lawyers added:
“The lack of explicit regulation does not imply that taxes should not be paid for gains and losses or that value added tax is not applicable.”
Ortiz, meanwhile, added that while bitcoin “is not yet controlled by any government or bank” and, “in the case of Mexico”, was not subject to any “special regulations,” nonetheless the benefits were ” taxable â.
” No matter if [tradersâ] revenue is accrued using a digital platform with servers based in other countries. The obligation to pay taxes still exists and must be fulfilled in order not to incur any fault or omission in the eyes of the financial authorities.
And Ortiz warned that taxpayers who fail to report their bitcoin investments will inevitably land in hot water.
Tax authorities, he said, “would invariably detect a tax gap”, noting that traders were using “unreported income”. This, he said, could lead to punitive measures depending on the extent of the unreported funds accumulated.
Earlier this year, the same company warned (also according to EFE, via the LA Times) that tax evasion in Mexico hit the $ 69.8 billion mark last year, a figure equivalent to 6% of GDP of the country.
FIXAT said top taxpayers accounted for 52% of all tax evasion in Mexico.
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