Foreign investors will not have to pay taxes on Bitcoin profits, a government adviser told AFP this week.
Javier Argueta, legal adviser to President Nayib Bukele, told the news source: “If a person has bitcoin assets and makes high profits, there will be no taxes. This (is done) obviously to encourage foreign investment.”
“There will be no taxes to pay for either the capital increase or the income,” Argueta said.
El Salvador takes full advantage of its first nation. There are many Bitcoiners around the world who want to move to countries that try to collect less capital gains tax. The irony of these taxes is that many states make it extremely difficult to buy Bitcoin in the first place and then expect people to pay capital gains taxes to sell.
El Salvador became the first country to obtain legal tender with Bitcoin on Tuesday. One-fifth of the country’s GDP depends on remittances. The introduction of Bitcoin as a legal tender will significantly reduce the fees on these remittances and completely eliminate the fees. Bitcoin is an important step towards banking in El Salvador as well.
Argueta told AFP that the Chivo portfolio has traceability measures to alleviate popular misunderstandings and false narratives that Bitcoin is used primarily for money laundering or for anonymous criminal activities.
“We are implementing a number of recommendations from international institutions against money laundering,” the adviser added.
Argueta also added that Bitcoin transactions would be temporarily halted if their dollar value collapsed, to minimize the impact of extreme relative volatility when a dollar price is set.
Although the government of El Salvador actually bought more Bitcoin when the price dropped a few thousand dollars for what is affectionately known as Bitcoin Day, making Nayib Bukele the first president to publicly buy a Bitcoin deposit.