Operations with cryptocurrencies must pay ISR: Prodecon

Although in Mexico there is still no specific tax regime that outlines the way in which income from operations with cryptocurrencies should be taxed, the Taxpayer’s Defense Attorney (Prodecon) suggests that the sale of these instruments be applied a rate of 20% of the total amount of the transaction for Income Tax (ISR).

A few days ago, Prodecon published the preliminary study regarding the tax regime applicable to obtaining income derived from the sale of virtual assets, where it indicated that, in its consideration, operations with these instruments conform to the figure of the sale of assets , provided for in article 14 of the Federal Tax Code (CFF).

“In the case of the sale of various assets to real estate, the provisional payment of income tax will be for the amount that results from applying the rate of 20% on the total amount of the operation, which must be retained by the acquirer (buyer)” , detailed the Prodecon.

According to the tax ombudsman, this situation applies when dealing with operations greater than 227,400 pesos, so if the transactions do not exceed this limit, they are released from the obligation to withhold tax and the respective provisional payment.

Likewise, the agency indicated that, in this type of operations, a Digital Tax Receipt must be issued over the Internet (CFDI). “The tax legislation establishes the obligation to issue the CFDI in all cases of disposal of assets.”

In the analysis, Prodecon highlighted that cryptocurrencies are not recognized as legal tender in Mexico and therefore, they are not authorized for this purpose, as they fail to comply with the functions of the classic definition of money; however, they are instruments by which commercial transactions can be carried out.

According to the agency, both the retention and the issuance of a CFDI must be carried out by the transferor (buyer) of the cryptocurrencies, in accordance with the provisions of the Federal Tax Code.

Prodecon referred to a study released by this means, which indicates that in Mexico at least 12% of the population owns cryptocurrencies. “12% of the Mexican adult population owns some cryptocurrency, so the country ranks as the ninth nation with the highest rate of possession of these instruments in the world.”

Vulnerable activity

According to the taxpayer protection body, it is necessary that in order to carry out a cryptocurrency purchase and sale operation it is taken into account that these instruments are considered a vulnerable activity, that is, that the platforms that are dedicated to the exchange of these are given registered as a vulnerable activity to send information to the authority for the purpose of preventing money laundering and terrorist financing.

“Certainly the development and adoption of cryptocurrencies has created a huge challenge for tax and financial authorities worldwide, as this type of digital instruments also constitute new methods to carry out illicit operations, including money laundering, so such This activity is subject to specific attention by the authorities as it is a vulnerable activity ”, highlighted Prodecon.

Different participants of the cryptocurrency ecosystem enlist their comments to the fiscal ombudsman to complement the analysis that Prodecon has carried out in this regard; However, this is the first attempt by a government body to clarify the issue of taxation in cryptocurrency purchase and sale operations.

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