The South American country of Venezuela has joined the list of nations collecting taxes for cryptocurrency and foreign operations according to a new directive published in the Venezuelan newspaper, Gaceta Oficial edition No. 6,420.
According to Decree no 3,719 of the publication, individuals and businesses who carry out transactions by using cryptocurrencies or foreign fiat are required to report their income and pay taxes in the same currency that they used for the operation.
In simpler terms, the directive means that people are no longer required to pay this kind of taxes in Venezuela’s native currency, Bolivar.
The only cases of tax exception stated in the Gaceta were for business operations backed by securities that are traded on the national stock exchange as well as for goods and services exported by publicly listed companies and entities.
Another decree in the Gaceta (no. 6420) explained that the approach and other directives are aimed at "strengthening the mechanisms of tax control to improve efficiency in the collection of national taxes.”
To this respect, the country has already started implementing the new decree and put its Ministry of Economy and Finance in charge of ensuring compliance by individuals and businesses.
National Cryptocurrency Petro to Serve As Unit Of Account
Although the publication did not define the rate of the taxes or how the foreign currency conversion will take place, reports have emerged that the government wants to use its controversial oil-backed cryptocurrency, Petro as a unit of account.
A local news source, Runrunes suggested that in municipalities such as Vargas and Maracaibo, the Petro cryptocurrency has been defined as the unit of account for payment of the foreign operation taxes.
If these were to be true, then comments made by the secretary of Venezuela’s tax administration service (SEDEMAT), Jean Carlos Martinez would come under consideration. The top official told another local news outlet, Noticias del Dia that the taxes would not be collected in Petro. Instead, he said that the cryptocurrency would be used to set the minimum tax rate.
As Stmarket.co reported in December, Japan is another country looking to reduce crypto tax evasion by amending its regulation.