This is the tax law of Venezuela

Large financial transactions carried out with bitcoin or other cryptocurrencies in Venezuela as well as those that are carried out without using the bolivar fiat money, will have to pay taxes of up to 20%.

In the document, now law, which was approved on February 3, the reform of the Law on Taxes on Large Financial Transactions (IGTF). This orders, among others, the collection of taxes (from 2% to 20%) on executive operations with currencies other than the bolivar and the cryptoactive petro.

The tax in this case varies depending on the currency or cryptocurrency used, but is subsequently expressed on the tax invoice in bolivars. The curious thing is that there is no floor or limit for these large transactions, but it is known that operations in the order of one dollar on regulatory platforms involve the sum of the IGTF.

A measure that will not affect bitcoin too much

The adoption of bitcoin and cryptocurrencies at the business level in Venezuela is quite low, so there will not be a big impact on the economy, mainly since they are not small and medium-sized companies.

According to the rule, those who must pay the Large Financial Transactions Tax are known as special taxpayers, which are those legal entities that the country’s tax agency identifies as having significant income.

In those cases in which a Venezuelan company adopts bitcoin or other cryptocurrencies and is identified by the regulatory entity, according to current regulations, it will have to pay the treasury between 2.5 and 20% in taxes for the operations carried out with these digital assets.

However, in the case of Venezuela, there still needs to be a push for cryptocurrencies at the business level so that bitcoin is massively adopted in the Venezuelan economy. In this way, no major changes are expected due to this measure that has been approved by the Executive in the country.

What happens to ordinary citizens?

The situation is different in the case of ordinary citizens who take refuge in bitcoin to try to alleviate the constant inflation in Venezuela. The new tax It will only affect them if they pay directly with cryptocurrencies other than the petro in a business that has its accounting expressed in digital assets. In this way, it will not affect ordinary Venezuelans, because these payments are not taxed.

In this way, if a person wants to pay with bitcoin at a location that is duly identified as special taxpayer, you will have to cancel, through the channels authorized by the National Superintendency of Crypto Assets (Sunacrip), the amount of the product plus all other taxes added, and all this will be expressed in bolivars.

These channels are some cryptocurrency exchanges based in Venezuela, which, although they promote the use of digital assets, have a very low transaction volume. This means that we have to resort to other means and platforms, especially peer-to-peer (P2P) trading provided by services such as LocalCrypto or Binance. With them, operations in cryptocurrencies can be carried out without it being necessary to inform the State of this. To do this, these companies would have to comply with the requirements of Venezuelan regulations.

Cryptocurrencies are complicated to control, but the real impact of these measures will have to do with the use of fiat money, especially with the US dollar and other instruments that are used in Venezuela to trade from the US currency.