The cryptocurrency market has reached high levels of popularity among the Salvadoran population and national and foreign businessmen. At the same time, it has presented many unknowns in issues such as its control and taxation. In the following article we explain how cryptocurrencies are taxed in El Salvador.

In view of this, our associate lawyer, Adalicia Torres, shared his knowledge on administrative procedures and his experience on tax issues at the premises of La Casa del Bitcoin.

During the presentation, Torres reviewed the content of the Bitcoin Law approved in June 2021 by the Legislative Assembly: legal aspects such as the official exchange rate, tax contributions, accounting purposes and all obligations in money expressed in dollars.

For Torres, an advantage that El Salvador has when making exchanges in the cryptocurrency is that they will not be subject to taxes on profits: “For example, in Colombia people are paying 30% of all income they have in bitcoin or for the services they provide in bitcoin. So, that is quite a high income”.

In this case, our expert refers to Article 5 of the Bitcoin Law where it is stated that bitcoin exchanges will not be subject to capital gains taxes just like any legal tender.

In this sense, Torres affirmed that the use of this cryptocurrency in the country is an attraction for all foreign investors who want to establish themselves.

In addition, Torres rescued another point in favor of the Bitcoin Law where it authorizes that all tax contributions may be paid in Bitcoin. “You could pay the mayor’s office with bitcoin, you could pay taxes to the government with bitcoin”, said our lawyer in the presentation.

READ MORE: Growth of digital financial services in Latin American.