Argentina’s tax authority, AFIP, said it will be able to seize all assets owed by taxpayers in digital wallets if tax debts are not settled. Last year, the organization recommended the law but only implemented it in early 2022 during the Covid-19 pandemic.
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The organization now has a procedure for confiscating the digital assets of these accounts. This addition will give authorities access not only to third-party bank accounts and loans, but also to homes and cars belonging to people who may be involved in cryptocurrency transaction history, even if they made those purchases decades ago! Official sources told local media that:
The development of electronic means of payment and their generalization explain the agency’s decision to include digital accounts in the list of assets seized to recover debts.
Financial institutions must disclose information about their customers when under legal pressure. Argentina’s tax authority has announced that it will confiscate the digital accounts of 9,800 taxpayers.
Crypto Tax Collection Procedure
Argentinian tax authorities are cracking down on digital wallets that manage the national fiat currency, such as Bimo and Ualá. The biggest target for these tax agents is Mercado Pago, an e-commerce platform with bitcoin-friendly policies allowing debtors to store their savings away from pesky collectors who want a cut in their income.
When a person or business owes taxes, it’s not just their digital wallet that the organization will target. First, the organization is looking for more liquid alternatives like cash; it moves to other assets such as cryptocurrency investments only after those funds are no longer available.
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The Argentinian government has a rigorous approach to cryptocurrency. In a recent interview with local media, Sebastián Domínguez of SDC Tax Advisors confirmed that they could even confiscate cryptocurrencies if the safekeeping of those assets is with an Argentina-based entity.
The novelty highlights the fact that digital wallets are targeted in the procedure due to their growth, but this does not imply that the rest of the assets are not subject to possible embargoes.
How does AFIP work?
AFIP is Argentina’s federal tax authority and it has the discretion to audit any return filed by a taxpayer during its own limited period of time.
AFIP is responsible for monitoring the accuracy of its tax returns. Therefore, the individual may be subject to audit by him at any time, and this may also occur in several different ways.
The government uses different methods to collect taxes. First, they could verify your income with a database. If there’s enough evidence to suggest you’re hiding something, then all bets are off on return visits. The second method is random sampling. Finally, an inspector will come just for fun or do it via computerized screenings.
The Argentine tax administration has the power to send requests for information to any sector of the country. And expect a response within 15 days of notification.
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