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Chile: Cryptocurrencies in Chile


Cryptocurrencies have been in the market for some considerable time. In fact, some have been around for almost two decades. Despite this, there has never been a real interest by the Chilean tax authorities in providing an opinion on the matter of how they should be taxed. That is, until now.

The high prices at which the cryptocurrencies were being trade during 2017 caused them to catch the attention of the public, and big investors began to appear.

Investment in cryptocurrencies is a volatile investment of high risk that can yield large losses or profits. With the high trading prices as well, the Chilean tax authorities are now showing an interest. If taxpayers are making profits, they should be levied with taxes.

Taxpayers should declare their profits or losses for 2017 in April 2018, paying their taxes accordingly.

Once the Chilean IRS provides its official view over a specific matter, if taxpayers adhere to the interpretation in good faith, they are protected from any eventual changes in criteria regarding the matter which might be introduced by the Chilean IRS. This would apply even if the IRS's first interpretation turned out to be wrong, and the taxpayer would remain protected until the IRS made another official pronouncement effective for later transactions. This kind of certainty does not exist regarding cryptocurrencies. Therefore, the role of the Chilean IRS here is crucial.

Chilean legislation does not provide any specific regulation for such assets. Certain categories exist, and the tax authority should indicate in which of those categories this kind of asset fits.

In the absence of official pronouncements, based on the general tax rules, tax specialists have theorised and come up with at least three possibilities to consider as regards these types of assets from a tax perspective: (i) As a foreign currency – although this would be difficult to sustain since it has not been yet recognised as a legal currency by any jurisdiction; (ii) As an intangible non-monetary asset; and (iii) As an intangible monetary asset (but not as a currency).

It has been said that the Chilean IRS has been officially requested for its opinion on the matter. In this regard, a local newspaper has recently claimed to have access to what would be the draft of the initial administrative approach for the tax treatment of cryptocurrencies. According to what apparently is a leak as regards a future ruling by the Chilean IRS, the fiscal authority is leaning towards considering the broad concept of 'income' included in the Chilean Income Tax Law. This would mean that any increase in a person's equity produced by cryptocurrencies would be subject to tax, and therefore would have to be recognised and declared to the Chilean IRS.

The same leak suggests that the Chilean IRS would conclude that cryptocurrencies could not be considered as currency since they are not recognised as such in local legislation. Instead, they would be deemed as monetary assets traded among private parties.

This would place the cryptocurrencies, for tax purposes, among assets like cash, bank deposits or credits, as assets that do not protect themselves from inflation. This would mean, at the end of the year no adjustment according to inflation should be made.

The notion of establishing that cryptocurrencies are a monetary asset generates a discussion on whether a taxable result should be recognised at year end. Monetary assets have intrinsic value and, according to specific rules, the change in value of some monetary assets must be recognised at year end, even if there is no alienation of the asset; while for other types of investment, a taxable result would only occur at the time of alienation. There is no clear cut answer in the case of cryptocurrencies, with arguments to be found on both sides.

Regarding income source, this is also an issue that remains to be resolved. For residents in Chile this is not yet so relevant since they are subject to tax on a world source basis. However, non-residents are only subject to tax in Chile on the income that was sourced in this country.

As for VAT, since cryptocurrencies are not corporeal goods, agreements to transfer them should not be subject to such tax.

Notwithstanding the above, it is important to take into consideration that these criteria have not yet been published, thus they have not been confirmed as constituting the official position of the Chilean IRS.

Moreover, to date the authority has not issued any instruction on compliance duties regarding this matter, thus there is still uncertainty regarding the obligations that taxpayers and intermediaries might have.






Gregorio Martínez ( and Elizabeth Paya (

PwC Chile


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