The Colombian tax office, DIAN, has reminded taxpayers that beginning this year, they must begin reporting cryptocurrency in their statements. The DIAN’s director, Lisandro Junco, warned cryptocurrency users that this type of asset is taxed in the same way that any other asset held by citizens is. Colombia has already collected $1 billion in taxes related to the digital economy.
Colombians Must Begin Including Crypto in Their Tax Returns
Beginning this year, the Colombian tax office reminded taxpayers of their obligation to declare Bitcoin assets in their tax returns. In a conference with local media, the organization notified the public that it is authorized to do verifications on data received from taxpayers in order to ensure the correct implementation of the country’s tax laws.
Lisandro Junco, the director of the tax authority, spoke about crypto assets and their tax status in Colombia. He stated:
Even though it is a part of the digital economy, you must pay taxes.
Furthermore, the organization stated that all items that meet the legal definition of assets, such as bonds, stocks, and cryptocurrencies, must be declared. However, not just cryptocurrency users should be aware of crypto taxes. According to BDO Colombia, an accounting firm, cryptocurrency miners must also record their mining numbers because the agency has classed mining earnings as income.
Penalties and Applicability
While most tax authorities currently rely on users to record their bitcoin transactions and holdings, the Colombian tax authority has several sources that can assist it in detecting cryptocurrency tax evasion. Junco claimed that the DIAN is involved in various information exchanges with other countries, which give the names of citizens who should be declaring crypto-related taxes. According to Junco:
And what we do is compare the major element to the tax return to see if there is opportunity for inaccuracy, evasion, or if it is up to date.
In Colombia, the penalties for failing to declare cryptocurrency taxes are equal to the amount of funds not included in the tax statement multiplied by the amount of funds not included in the tax statement. According to Junco, who asked taxpayers to report their cryptocurrency holdings, Colombia has collected $1 billion in taxes related to the digital economy in the last three years.
The authority had earlier announced a series of initiatives aimed at tightening the control over bitcoin usage in order to discover tax evasion more quickly.