El Salvador to exempt foreign Bitcoin investors from taxes

The government of El Salvador will exempt foreign investors from capital gains tax and the income tax on Bitcoin transactions. This was stated by the president’s legal affairs adviser Javier Argueta in a comment to AFP.

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\”The move is aimed at attracting foreign investment,\”—the official said.

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The authorities intend to combat the use of Bitcoin in illicit activity. To this end, according to Argueta, a mechanism for tracking payments has been implemented in the Chivo crypto wallet.

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\”We are implementing a set of recommendations from international organizations on anti-money laundering,\”—the official said.

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The adviser also pointed to the possibility of halting Bitcoin transactions should the price fall sharply. This would help mitigate the negative consequences of using the cryptocurrency as a means of payment, he added.

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As reported, on September 7 in El Salvador the law recognizing Bitcoin as a legal means of payment came into force.

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According to former product director of the cryptocurrency exchange Liquid Mario Gomez Losada, payment companies and systems could lose up to $1 billion per year due to the integration of the Chivo Bitcoin wallet into El Salvador’s financial system. According to AFP, remittances into the country account for 20% of its GDP.

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