Key message: According to the Salvadoran government, foreign investors in El Salvador will be exempt from profit tax from BTC, said Javier Argueta, the legal advisor to the Salvadoran government. This is a development to further encourage entrepreneurs and investors to enter the country.
So if a foreign investor owns Bitcoin and makes profits, they will not pay any tax on them. Argueta also said that the country is working on putting in place measures to comply with the regulations, namely by working with international agencies. However, key concerns such as traceability and prevention of illegal activities in finance need to be looked out for. This was stated by global bodies.
El Salvador has recently adopted Bitcoin as legal tender and of course this has not gone without problems. El Salvador’s decision could be likened to a roller coaster ride for the country. This is the first step of its kind. So many are curious to see how this change will play out going forward. The next 12 months will be crucial.
Such acceptance has not, of course, been without criticism. This has come from the opposition party to the global body, but the government of El Salvador has stood firm. However, the truth is that even though the beginning was not ideal and the current development is not ideal either, El Salvador is a very friendly country for cryptocurrencies in terms of profit taxes. Thus, investors can be expected to travel to the country.