How is bitcoin taxed in El Salvador?

No tax on bitcoin profits for foreign investors: El Salvador after recognising cryptocurrency. “If a person has assets in bitcoin and makes high profits, there will be no tax. This (is done) obviously to encourage foreign investment,” Javier Argueta, legal adviser to President Nayib Bukele, told AFP.

How will bitcoin affect El Salvador?

Bukele is touting Bitcoin as a way for Salvadorans to reduce the fees they pay to send and receive remittances—which make up 22\% of El Salvador’s GDP, mostly from the U.S.—and as a way for the 70\% of Salvadorans who are unbanked to access financial services.

Is bitcoin the official currency of El Salvador?

El Salvador has officially adopted bitcoin as legal tender. Draft legislation may soon lead Panama down the same path, while China, the US and the UK are investigating launching their own cryptocurrencies. Here’s what you need to know.

What is Salvador adopting bitcoin?

President Nayib Bukele, a tech-savvy millennial, has promoted the digital currency’s adoption, pitching it as a way of bringing more Salvadorans, about 70 percent of whom don’t have bank accounts, into the formal economy. Bukele announced it, in English, at a Bitcoin conference in Miami.

Does El Salvador have capital gain tax?

“There will be no taxes to pay on either the capital increase or the income,” the legal adviser to President Nayib Bukele said. “There will be no taxes to pay on either the capital increase or the income,” Argueta said. El Salvador is making the most of its first-mover nation advantage.

Does El Salvador have a sales tax?

The Sales Tax Rate in El Salvador stands at 13 percent. source: Ministry of Finance.

Will bitcoin become legal tender in El Salvador?

Its use as legal tender will begin in 90 days, with the bitcoin-dollar exchange rate set by the market. Bukele said the government and Central Bank did not currently hold any bitcoin. In the capital, San Salvador, reactions were mixed, with some excited that the new currency could increase prosperity and financial options.

Which is the first country to adopt bitcoin as legal tender?

SAN SALVADOR, June 9 (Reuters) – El Salvador became the first country in the world to adopt bitcoin as legal tender after Congress on Wednesday approved President Nayib Bukele’s proposal to embrace the cryptocurrency, a move that delighted the currency’s supporters.

Can bitcoin help Salvadorans living abroad send money back home?

Bukele has touted the use of bitcoin for its potential to help Salvadorans living abroad to send remittances back home, while saying the U.S. dollar will also continue as legal tender. In practice, El Salvador does not have its own currency.

What will happen to bitcoin under the new tax law?

Accounts will still be kept in U.S. dollars; bitcoin is just a dollar substitute. The executive branch will build the infrastructure for bitcoin payments; in fact, Article 15 of the law says that any provision of a previous law that would regulate bitcoin is repealed—an all-encompassing enabling act, as long as bitcoin is involved.