Crypto Taxation in Chile : A Complete Guide

Crypto is growing fast in Chile. The population of those who buy Bitcoin, Ether, and other digital coins is growing every day. When it expands, a massive question comes in; Do I pay tax? Indeed, in Chile the tax office, the Servicio de Impuestos Internos (SII), states that profits made in crypto are subject to tax. The non-observance of the regulations can lead to the imposition of enormous fines. This crypto tax policy guide is in a non-technical language and explained in an easy to understand manner to allow you to trade, mine, or stake without any fear of violating the policy in Chile.

Tax Authorities & Regulations

Service de Impuestos Internos (SII), head office.

The Central Bank and the Financial Market Commission (CMF) are two other bodies that are coming up with more rules against exchanges and stablecoins.

• Intriguing cases: SII 963/2018 and 1474/2020 declared that crypto is not a form of cash but of intangible assets. On the one hand, profits are exposed to regular income laws.
• The Fintech Law 2023: Exchanges, brokers and custodians have to be registered with CMF, subject to anti-money-laundering checks and annual reports of trades with SII.
• Bottom line: Crypto is not something illegal, but every transaction, sale, or payment may get taxed.

Types of Crypto Taxes in Chile

• Capital Gains Tax: It is charged when you sell, exchange, or use crypto at a higher amount than you purchased it.
• Income Tax: Includes mining, staking, airdrop, salaries, or freelance income.
• Value-Added Tax (VAT): 19% on exchange or brokerage fees, not on transfers of the coins themselves.
• Wealth & Inheritance Taxes: Digital coins are included in your estate or net worth amounts in the ordinary way.

Tax Rates & Brackets

• People: Capital gains are taxed according to the Global Complementary Tax scale (0% – 40%).
• Companies: Net crypto profits are taxed at a unified rate of 27% First-Category Tax (25% in small-business regime).
• Mining income: People pay in advance 25%; this serves as a credit against tax at the end.
• Good news: simply by having crypto, you do not have to pay tax until you sell or spend.

Crypto Transactions & Tax Treatment

• Purchasing and holding coins – no tax yet.
• Selling, exchanging or using coins to purchase coffee – taxable gain or loss.
• Mining rewards: are treated as income at the market value on the day you receive the rewards.
• Staking rewards and airdrops smack of income, too, when they land in your wallet.
• Earning crypto as payment of work : is considered as a salary; the employer is required to deduct tax.
• Crypto-to-crypto exchanges: each exchange will be taxed.
• DeFi lending, yield farming, liquidity pools earnings are income, and gas fees can be deducted.
• NFTs: the profit of the sale is taxed; royalties are listed as the income of the artist.

Crypto Tax Reporting & Compliance

You report crypto profits on the Form 22 every April. Record all the taxable events: date, coin, amount in Chilean pesos (CLP), cost, and fees. The FIFO (first in, first out) cost method is the default one. You can apply the weighted-average cost, however, you should remain consistent after selecting one. Trade data is already being sent to SII by exchanges, so such mismatches are red flags. Trading fees have to be charged by businesses and 19 % VAT should be added and legal invoices issued. Delinquent or missing returns may attract up to 30 % additional tax with interests. Retain all wallets, screenshots and invoices at least 6 years.

Tax Deductions & Exemptions

One is able to deduct crypto losses against crypto gains within the same tax year reducing the overall bill. Business organizations can roll over losses to the subsequent years. The costs that may be deducted are exchange commissions, blockchain-analysis software, electricity to power mining rigs, mining hardware, and sensible cybersecurity tools: provided you have legitimate invoices. Network gas charges lower the profit made on that particular trade. You are not allowed to deduct personal expenditures like a new phone that was purchased using crypto. Chile has no special long-term holding breaks, although since tax is only charged when you sell coins, there is a delay in paying tax when you do not sell them.

Enforcement & Penalties for Non-Compliance

SII follows undeclared crypto gains by relying on exchange reports, bank data, and blockchain analytics. Local exchanges are highly regulated in terms of KYC, where names are associated with the wallet activity. In the event that SII finds out that you have under-reported, you will be required to pay back taxes, 1.5 % monthly interest, and up to 300 % of the unpaid amount of fines.

Any evasion above an approximate of CLP 46 million (= USD 50,000) may turn into a criminal case that can lead to up to five years in prison. Firms who evade VAT on their trading charges are subjected to additional levies and are even deprived of issuing electronic invoices. Penalties are usually lessened through voluntary corrections. To avoid getting into trouble, maintain clear records and file in time.

Future of Crypto Taxation in Chile

The CMF has plans to fully license exchanges and custodians by 2026, which will increase transparency. The Central Bank is researching stablecoin regulations and a potential digital peso (CBDC). Legislators negotiate tax incentives on fintech exports, which can potentially extend to crypto services. Get ready to see stricter data disclosure and, possibly, pre-completed tax forms, which already have your crypto trades on them.

Conclusion

Chile treats crypto gains as ordinary income: the sale of coins or the receipt of mining rewards or collecting trading fees would trigger a taxable event. Possession of coins does not attract tax until the coins are disposed of. The best way not to be fined is to have good records, a consistent cost-basis method, and timely filing of Form 22. 

The regulations are subject to alteration, thus subscribe to CMF and Central-Bank news to keep yourself updated. In case of doubts, consult a professional tax advisor- he/she will assist you to take deductions, plan trades, and remain within full compliance.

FAQs

1. When I transfer crypto between my own wallets do I pay tax?

No. Transferring between wallets you own is not a taxable event.

2. Does a sandwich purchased using Bitcoin have to be taxed?

Yes. Using crypto is a sale; you have to determine the gain or loss.

3. Is it possible to change between FIFO and weighted average annually?

No. Choose a method and then stick with it unless the SII authorizes a change.

4. Do free airdrop tokens have a tax bill even when I do not sell them?

Yes. They are income to you when you get the control, although you may still be holding.

5. Is it possible to pay taxes in Bitcoin?

No. All the taxes should be paid in Chilean pesos using normal banking.