El Salvador Will Not Tax Bitcoin Profits Made by Foreign Investors

<p>According to Javier Argueta, legal adviser to President Nayib Bukele, foreign Bitcoin investors will not be required to pay capital gains taxes in El Salvador.</p> <p>El Salvador's President Nayib Bukele is seeking international money to bolster the country's Bitcoin business, particularly in light of the contentious process he took to have the cryptocurrency accepted as legal tender.</p> <p>A reportedly recent executive order may be quite beneficial for bitcoiners in El Salvador... as long as they are foreigners. According to an interview with AFP's Javier Argueta, legal adviser to President Nayib Bukele, foreign investors who profit from Bitcoin will avoid paying capital gains taxes on their income:</p> <p>“If a person owns bitcoin and earns a lot of money, there will be no tax. Obviously, this is done to entice foreign investment. There will be no taxes due on either the increase in capital or income.”</p> <p>Capital gains are taxed at a fixed rate of 10% of nett income under current law. Securities capital gains are also taxable.</p> <p>According to Article 5 of the Bitcoin Law, bitcoin exchanges will be exempt from capital gains taxes, just like any other legal cash.</p> <p>The Law makes no provision for exemptions for foreign industries, businesses, or merchants.</p> <p>El Salvador's Politics and Bitcoin Have an Odd Relationship</p> <p>Argueta's statements provide an incentive for more businesses to locate in El Salvador. Nayib Bukele has been teasing the prospect of opening the country to foreign investors prepared to create Bitcoin-related services for several months.</p> <p>Even before the Bitcoin Law took effect, the cryptocurrency application Strike was instrumental in the establishment of the Bitcoin Beach project in El Zonte.</p> <p>However, no executive order or interpretation has been issued that would legitimise Argueta's assurances. It is critical to recognise that discrepancies over the Law's application are not uncommon in Salvadoran politics. The most prominent example is Presiden