According to a presidential legal advisor, the El Salvador government will exempt investors from paying a capital gains tax and income tax on Bitcoin (BTC).
As well as reported from Agence France-Presse on 10 September, Javier Argueta, legal advisor to President Nayib Bukele, encourages foreign investment through major Bitcoin tax breaks.
“If a person owns Bitcoin assets and makes high profits, there will be no tax. This was obviously decided to encourage foreign investment, “Argueta said, adding that El Salvador will not impose taxes” on capital gains or income “.
Argueta further stressed that the Salvadoran government would actively track Bitcoin transactions on El Salvador’s official BTC wallet, Chivo, to combat potentially illegal use of cryptocurrency. “We are implementing a series of recommendations from international institutions against money laundering,” he said.
The Chivo wallet would also temporarily stop Bitcoin transactions on the application if the Bitcoin value were to plummet, to minimize the impact of extreme volatility or price fluctuations.
On Tuesday, El Salvador became the first country in the world to adopt Bitcoin as legal tender, requiring all local traders to accept BTC as a means of payment. In partnership with global companies such as cryptocurrency exchange Bitso and Silvergate Bank, El Salvador has lanciato Chivo, the official BTC wallet, which allows users to convert BTC to US dollars or withdraw using a special ATM, with no transaction fees.
As previously reported, on the day of the launch the Chivo wallet was temporarily removed for maintenance. According to several social media reports, despite the works last week, some users of the Chivo wallet they would still encounter major problems with transactions and withdrawals.
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