Colombia clamps down on crypto tax evasion as adoption thrives

Colombia’s tax authority is tightening the screw on Bitcoin and cryptocurrency-related tax evasion against a backdrop of burgeoning cryptocurrency adoption. Read the full article by Joseph Hall

In many Latin American countries, cryptocurrency adoption is slowly becoming all the rage for many reasons. The most prominent being the advances that it makes on cross-border payments or remittances. For many people, remittances make up a large portion of their income, and using cryptocurrencies cuts the fees accrued along the way down significantly.

This is just one way that crypto can benefit people and why it is seeing a large rise in use but that also leaves the country to figure out how they are going to tax crypto so they do not miss out on their cut. Colombia wants to take “special measures” to start cracking down on people who are not paying the taxes they should be on cryptocurrencies as it continues to increase in popularity.

“Currently, operations with crypto assets are a reality worldwide and with the boom in the use of so-called virtual currencies or cryptocurrencies, the DIAN has initiated actions aimed at to control the taxpayers who carry out operations with them.” Colombia’s tax authority, the DIAN. As it stands currently, the laws in Colombia prohibit banks and financial institutions from protecting, investing, brokering, or managing cryptocurrency operations. Citizens; however, can invest and legacy institutions are finding their own ways around it.

The DIAN wants to establish a framework that will point out those who are either not reporting income made on crypto or inaccurately reporting their gains. Colombia is one of the leading countries in terms of crypto use as they are the second most active country in terms of BTC trading. Banco de Bogotá is one of the oldest banks in the country and they announced that they will be exploring crypto services for its customers. The Winklevoss twins also partnered with Baco Colombia to allow its clients to trade BTC, ETH, Litecoin, and Bitcoin Cash. There is a lot going on around the world and everyone is scrambling to figure out how to control it. Let’s see who comes out on top of that.