The Argentine Tax Authority (AFIP) has already discovered discrepancies when comparing information from tax returns and the crypto holdings of numerous taxpayers with reports from local exchanges. 3,997 citizens of Argentina have reportedly already received letters from the organization about these issues, giving them the chance to update their tax returns to reflect their bitcoin holdings and pay additional taxes.
These notifications would be sent to taxpayers who had used local cryptocurrency exchanges and were required by law to provide the AFIP with operational information. They would be linked to statements that had been filed during 2020.
Can Crypto be Seized in Argentina to Pay Tax Debt?
However, if taxpayers are questioned about their expenses and bitcoin purchases in 2020, they might be required to provide documentation of their holdings going back to the time of acquisition. This may result from the need to revise cryptocurrency statements for years prior to 2020.
These efforts may result in the seizure of bitcoin, which analysts say is still a contentious matter. According to Argentine lawyer Daniel Perez, there are still no regulations that permit the government to seize custody of these bitcoin wallets. Digital accounts, on the other hand, can be frozen, and the organization has done so since February with more than 1,200 of these.
In an interview with Iproup, he stated:
“The law would have to be modified to clearly stipulate the possibility of seizing electronic wallets. The AFIP knows this, and that is why it is trying to sneak into the Budget an article that gives it the power to do so both with respect to fiat money and bitcoin.”
This new provision would only apply to cryptocurrencies housed in noncustodial wallet providers and exchanges, which would further restrict its applicability. The state’s ability to have citizens hand over their private cryptocurrency keys to authorities is currently unknown.