El Salvador Axes Income Tax for Investments From Abroad
The nation, which is attempting to attract foreign capital, removed income tax on investment from overseas.
Mar 13, 2024 at 4:38 p.m. UTC:format(webp)/cloudfront-us-east-1.images.arcpublishing.com/coindesk/EYUNTEWQINA2DOGLENV6KX2U34.jpg)
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El Salvador, the nation led by bitcoin-friendly President Nayib Bukele, has eliminated income tax on money coming into the country from abroad.
"Congress has reformed our income tax law, for international investments and money transfers, dropping the rate from 30% to 0%," Bukele said in a post on X.
El Salvador was the first country to make bitcoin (BTC) legal tender and has been accumulating the cryptocurrency since September 2021. The Central American nation’s treasury is sitting on around $84 million in unrealized profit on its holdings.
This tax reform is the latest action as El Salvador attempts to position itself as an attractive destination for foreign investment and bitcoin enthusiasts. The nation also introduced a law in December granting citizenship to bitcoin investors who make a donation to the government.
"[El Salvador]the most attractive country in the world to live in just because they embraced bitcoin,” said billionaire investor Tim Draper on the Web3 Deep Dive podcast recently. “Within 30 or 40 years they will have gone from the poorest and most crime-ridden nation to one of the richest and most innovative nations in the world only in that period of time and only because they embraced bitcoin.”
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Lyllah Ledesma is a CoinDesk Markets reporter currently based in Europe. She holds bitcoin, ether and small amounts of other crypto assets.