Paying Taxes on DeFi Yield in Argentina: Your Complete 2024 Guide

Understanding DeFi Taxation in Argentina

As decentralized finance (DeFi) explodes in popularity across Argentina, many investors are earning substantial yields through staking, liquidity mining, and lending protocols. However, these profits aren’t tax-free. Argentina’s tax authority, AFIP (Administración Federal de Ingresos Públicos), considers cryptocurrency earnings taxable income. With Argentina’s complex tax landscape and high inflation, understanding how to properly report and pay taxes on DeFi yield is critical to avoid penalties.

How Argentina Taxes DeFi Earnings

Argentine tax law treats cryptocurrency as a financial asset, not currency. This means:

  • DeFi yields (staking rewards, liquidity provider fees, etc.) are taxed as ordinary income upon receipt
  • Subsequent sales of crypto assets may trigger capital gains tax
  • Taxes apply regardless of whether you cash out to pesos or hold in crypto
  • All values must be converted to Argentine Pesos (ARS) using the official exchange rate at transaction time

Step-by-Step Guide to Calculate Your Tax Liability

  1. Track All Yield Events: Record dates and values of every reward distribution (e.g., daily COMP tokens from Compound)
  2. Convert to ARS: Use AFIP’s official exchange rate (Comunicación A 3500) on the day you received the yield
  3. Categorize Income: Most DeFi yield falls under “Rentas de la Cuarta Categoría” (capital income)
  4. Apply Deductions: Subtract verifiable costs (gas fees, platform charges)
  5. Calculate Tax:
    • Income Tax: Progressive rates from 5% to 35% based on annual income brackets
    • Personal Assets Tax (Bienes Personales): 0.5% to 1.75% on worldwide assets exceeding ARS 6 million

Reporting Requirements and Deadlines

Argentine taxpayers must declare DeFi earnings through:

  • Annual Income Tax Return (Declaración Jurada): Due April-June following tax year
  • Form 720: For foreign crypto holdings exceeding ~USD 100,000 (due March 31)
  • Monthly Tax Payments: If registered as monotributista or responsible inscripto

Key Documentation: Transaction histories, wallet addresses, exchange records, and screenshots of yield distributions. Maintain records for 10 years.

Special Considerations for Argentine Crypto Investors

  • Stablecoin Yields: Even USD-pegged yields must be converted to ARS at official rates
  • Reinvested Earnings: Taxed upon receipt, not when cashed out
  • Losses: Capital losses can offset gains but not ordinary income
  • DeFi Airdrops: Treated as taxable income at fair market value

Penalties for Non-Compliance

Failure to report DeFi earnings may result in:

  • Fines of 50% to 100% of unpaid tax
  • Monetary correction adjustments for inflation
  • Criminal charges for severe evasion cases
  • Asset freezing through AFIP’s “Fiscalización” powers

FAQs: DeFi Taxes in Argentina

Do I pay taxes if I only hold crypto without selling?
Yes. DeFi yield is taxed upon receipt, regardless of whether you sell or hold.
Which exchange rate should I use for conversions?
AFIP’s official exchange rate published daily (Comunicación A 3500), not parallel market rates.
Are there tax treaties for foreign platforms?
No. Argentina doesn’t recognize foreign tax credits for crypto earnings. Double taxation may apply.
How does inflation impact my taxes?
AFIP adjusts tax brackets annually for inflation, but crypto gains aren’t inflation-adjusted. Losses from devaluation aren’t deductible.
Can I deduct DeFi transaction fees?
Yes. Gas fees, platform commissions, and operational costs directly related to yield generation are deductible with proper documentation.
Is there a tax-free threshold?
No specific crypto exemption. General income tax thresholds apply (ARS 1.8M/year for 2024).

Staying Compliant in 2024

With AFIP increasing crypto surveillance through exchanges and blockchain analytics, transparency is essential. Use crypto tax software like Koinly or CriptoYa to automate tracking, and consult a contador público (CPA) specializing in crypto. While DeFi offers exciting opportunities in Argentina’s volatile economy, proper tax compliance ensures you avoid costly penalties while maximizing your returns.

BlockverseHQ
Add a comment