 Hi, everyone. I'm here to remind you that even though crypto isn't in no type of crypto is currently a form of money in Colombia, that doesn't mean you don't have to pay taxes on it. That's a joke. Yeah, no, but even because of this, we want to make sure that the rules for paying taxes on crypto and crypto-related activities are clear. We're taking steps to make things even clearer than they currently are. A few of you may have wondered, especially if you, even if you have just used a crypto platform, if you have to pay any taxes on the gains that you make from your investments, or if you run a platform, I don't know if representatives of the exchanges in the country are here, we would like to make sure that you know exactly what rules you have to follow. Briefly speaking, even though crypto is not legal tender in Colombia, it is considered for tax purposes and intangible asset, which basically follows the treatment that other jurisdictions give to crypto and in general to many digital assets. In Colombia, you have to fill out a tax return as just a natural person. You have to declare your net worth, which is a very particular thing to the Colombian tax system. Many of you guys probably have heard the debate in Congress about taxation of your net worth, how it's calculated. If you're curious about this, you would basically have to tell us, to tell the tax administration, the value of the crypto at the peso value that you acquired it on the day when you acquired it, you just have to tell us there's currently no taxes on your net worth. There have been in the past, but this is only for informational purposes. Everything else is essentially capital gains taxation. If you buy crypto or other assets, if you buy NNFT and it increases in value, you don't have to pay any taxes until the moment when you sell it. If you sell it, you make money on it. The difference between the price which you bought it and the price that you bought for it is the basis on which you have to pay a rate. That rate will depend on whether you have held the assets for two years or more. If you have held them for more than two years, this is roughly speaking the capital gains tax. It's called ganancias ocasionales in Colombia. It's currently a 10% tax rate. If the tax reform bill that we're working on goes through, it will be at 15% of the appreciation. If you sell the asset before two years, then you just have to pay the ordinary rate, which is a progressive taxation scheme. It starts at 19%. At very high levels of income, it goes all the way up to 39%, which is much like what you would pay in the United States for ordinary income as well. You may have wondered, I know because I have, if you're in an exchange and you buy and sell crypto, maybe you're just playing around with any type of cryptocurrency and you sell it to someone. If you like to think about tax issues, which some people do, you may wonder, does this pay VAT, the value added tax in Spanish? There are activities such as exchanges that do not pay VAT. When it comes to intangible assets like crypto, then as long as they don't have an intellectual, commercial, industrial value, so this is more like patents, right? If they don't have that added value, then you're not responsible for paying VAT. However, if you're selling, say, at least some sort of NFTs, there may be VAT to be paid. Especially if you're thinking of running a business that operates buying and selling crypto, NFTs, other types of digital assets, these are things that you may want to take into account. We want to make this easy for those paying taxes, right? You have to pay them. The least we can do is make it easy for you. We are here to help. I have given instructions to the sub-directorate in charge of norms, interpreting the tax norms for specific cases and specific industries to compile all the concepts we have issued about crypto in a single document. But also, we are here to collect the questions that you may have. We want to issue an official concept about this. We want to do this both in Spanish and in English. We want to have clear rules for those coming from abroad to invest. Even though I think we're all excited for the closing event at 3.30, we are here to take questions. Yeah, sure. So you were mentioning that we would have to pay taxes if I purchase a Bitcoin, let's say it goes up in price, and then sell it for fiat currency. But if I were to buy a Bitcoin and then swap it to another currency, another digital currency, let's say Ethereum, and the price will technically create a taxable gain, how would I pay that tax? Would I pay it in the value of the local fiat currency? Would I pay it in one or the other intangible assets? How would you do that? That's a great question. Because currently Ether and then that Bitcoin are not currently considered currency in Colombia, and you're just swapping assets. It may depend, but you would probably just have to pay the time you sold in your example, the Ethereum for fiat. And then I think that also raises the question of what do you do if you buy something in crypto, right? Like if you buy a house in crypto, like what would you do? How does it work? And then in that case, you would have to take into account the value at which that house is fairly valued and the value of your asset, and then that difference would be the basis for taxation. You never specified whether it was first in, first out, which is if I had bought Bitcoin and maybe I put it off to the side for long term storage or Ethereum, whichever asset. And then later I start trading with other assets over here. So first in, first out would say that the very first purchase of the asset, Ethereum would say, was at $100 and now it's at $1,500. It doesn't matter my trades over here. It's first in, first out. Do you understand the first in, first out? So you never specified whether there's a first in, first out rule that you have or not. I think what's really helpful for thinking out all of this is that for all practical effects and purposes in Columbia, crypto assets are intangible assets. So you would handle the inventories in the same, you would follow the current accounting rules, right? And in Columbia this, I don't know what accounting rules you're most familiar with, but we wouldn't be using US, US gap, but we would be using IFRS rules for accounting. So that's what would apply in this case. I think probably in the concept and in the document that we will post, I will post it on my Twitter account to start clarifying some of those things, but mostly to invite questions like this so that we can give you specific detailed answers. Yeah. What about the crypto you gain like paying on services? For example, I have an income on crypto, how do you tax that? Currently, so you can be paid in things other than Fiat in Columbia, and that's already regulated, right? You could be paid. So some people are paid at least partly in education for their children, right? Like their firm pays their children's tuition or they give them access to country clubs which have a certain value and all those payments in basically in stuff, the same rules as for payments in income and Fiat apply. So you would basically have to tell the government what's the, so what's the fair market Fiat value of the crypto and that would be the basis of the tax you pay. But you would pay exactly the same as if you were being paid in Fiat. So suppose you work for a company that's paying you in crypto, then they pay you and you tell the government this is how many pesos this was worth, then you pay taxes on the basis of that, but then your crypto continues to gain in value. If you sell it to buy something else, then at the moment of selling it, you would pay an additional tax on those capital gains, basically, yeah. And if you found someone who was willing to sell you stuff directly for crypto, then this follows the same. There are rules and regulations in Colombia that apply to exchanges of stuff, right? Like if you trade, I don't know, if you trade a house for five cars, which is something that people sometimes do, you would apply the same rules in the tax code. Some wallets have debit cards, even by Visa or Mastercard. So how do you make a chain of taxes whenever you have a wallet that you save in USDC or whatever and then spend it in retail, let's say in a cafe? I think there will be taxes along the way, but who is paying what in that change? So, I'm sorry, the question is you have a... I don't have one, just say anything. More of a comment, yeah. Hypothetically, there is a wallet with debit cards. So how do they pay taxes along the way when you have debit cards, the payment processors, and there is a crypto wallet involved? Right. Yeah, currently, none of that. So those are things that would have to be regulated by the financial authority, the Colombian SEC, the Superintendencia Financiera. Because the regulation is still to come, you would basically not pay a lot of things that you pay in the current financial system. You may be aware that in Colombia, there is the 4 por mil, which is like 0.4% tax on financial transactions, that would apply only when you convert that into fiat and into the traditional financial system, but that's not the case. That's a great idea to raise her anyway, I'll take that one with me. Just kidding, but not entirely. What's your position about using any cryptocurrency as a collateral to have pesos or use dollars? Are you deal with it? It's a collateral, like for getting a loan or... Yes, exactly. Yeah, this is still something that has to be regulated by the financial authority, so I suppose you could sign a private contract and then you give this as a collateral as long as someone else accepts it, you could sign a contract that specifies it, right? Right, okay, so in the case of DeFi, this is one of the questions that we currently want to address in detail because it's a question that we've been... We're being asked a lot, so we're working on issues related to DeFi for sure. Your office published a document like four months ago, the former director, regarding these taxes on crypto. That document is still... Ryan, we have to apply that? It's still in force. There were roughly 25 documents that we had published answering various questions, so what we're doing is we're compiling all of them in a single document so that you have everything in one source, but nothing has changed. We just want to make this more accessible, and like I said, some of these questions and more, if you guys want to talk to the two lawyers from the end that came here. So with me, we will make sure to address them. We want to have a comprehensive treatment of how to handle these tax issues, to give everyone more certainty and instability, and hopefully not have to pay very expensive consultants when we can do it for free for you. The context of my question is because the former director said in Caracol Noticias that people that need to declare their crypto, they have to do it from 2017, and they have to pay the multas from those years, 17, 18, 19, 20. And what do you think about that? Because the incentives are maybe not aligned, and people don't want to declare something to be a bad person and paying those multas. As part of the tax reform bill that we are shepherding through Congress, we are trying to make a lot of those fines, not just for crypto specifically, but for a lot of different businesses and also just regular people, a lot more understanding of when people are not really at fault, and we want to focus on actual tax evaders. The process is still ongoing, so as I said, we welcome all feedback that you may have about the provisions that we have already included in the bill and what else could be useful. One thing that we have gotten a lot of questions about has to do with whether we will accept taxes in crypto, it's something that we as a tax administration can do if given legal authority by Congress, we can handle it. We think it's actually very interesting if a firm or if a person wants to be associated with a specific wallet or sets of wallets, because that actually, as you guys know, a lot of people still think that crypto is cryptic and that you can't trace stuff, we are actually interested in the traceability of a lot of the cryptocurrencies and that can only be good for us as a tax administration, so we are very open to all of these proposals. Talk to your congressman or congresswoman, there is still time to introduce some provisions here. The first one is we have talked about a lot of taxes, but what's your truly vision about crypto? Would you be considered as a pro-crypto person or are you a tractor? The other question that I always ask, do you hold any crypto? Do I what? Do you hold any crypto? I've held it, yes. Oh no, for sure. I think it's a technology that's here to stay. I think it's promising. I think there's a lot of misconceptions about crypto. I think we should help everyone understand that this is a promising technology. I look forward to the forthcoming regulation that various other government agencies, or which I have no control, I should say that, will issue at some point. I think it should be sooner rather than later. I think there's one of the developments that I find most exciting is central bank issued digital currencies. I was excited, like I suppose many of you were, when the central bank announced that they are studying the issue. I think only good things can come from this industry. Okay, I have another question. It's more about stable coins and USDT, USDC. If I get my pesos and always convert them into US dollars or, well, in this case, USDT or USDC, then when I need the money back in Colombia, I transfer them back to my account. What would be the tax incentives and implications there? Because you said it's like buying dollars in una caja de cambio and then just either spending it abroad or just having them in your house or whatever. What would be the implications there? Yeah, so something like USDT or other stable currencies, stable coins are, they are not legal tender here or anywhere. So they are under Colombian legislation and then rules. They are considered just intangible assets. So the way it would work is say you, so suppose you buy, I don't know, you go through a whole process, right? You deposit some pesos into a local platform. You use it to buy Bitcoin, which then you, in a local platform, then you transfer to a platform abroad and you use it there to buy some USDT and then you do some more stuff with it and then you bring it back. The way it would work in terms of it being taxed is you, there's a certain amount in pesos that you paid at the exchange rate, the official exchange rate of that day, the TREM, the Taza Representativa del Mercado. And then when you transform it back into pesos at the very end, it's the difference between the pesos you got at the very end and the peso value of the original asset. That would be the capital gains, so to speak. You've stated your position very clearly about the crypto coins and all these coins that are natively digital, but there are also other type of tokens that represent, for example, real life assets such as houses and other kinds of things. Is your take the same for those types of assets that have real assets, like it's an underlying value in real life, but they're just represented digitally? I like the technology. Look, I just run the tax administration. Those are issues for various government entities, right? I think it's exciting to see how ownership registries would work, how the financial regulation really is what, as we all know, is necessary for this industry to have a more solid footing. And I do hope, and I know that the people involved in this understand the issue and they're working towards making things like that possible. I think, in general, it's an exciting technology. And I also think that the financial regulation that we're still trying to figure out all the possible ways in which the technology can be used, so I'm sure there's more to come. And those are good examples of what we could see. Oh, the taxation. Okay, so when you have underlying assets, well, in that case, yeah, basically, the difference between the Peso price when you invest it and the Peso price when you finally sold it, that's what will be taxed. And it will be taxed as either capital gains or ordinary income, meaning ganancias ocasionales or rentas no laborales. You mentioned the CVDC, and there is an incentive for the tax authority to look everything that the citizens do for tax purposes in that sense. What do you think, what is your position about the privacy of the citizens? What is the balance between knowing and taxing what they do and knowing a lot more that you need to know? I think that's a question for the Colombian society to answer as a whole. I'm going to be profanist from the point of view of the tax administration. We're interested in the traceability of transactions, especially given that the Colombian economy is so informal and so many people use cash. I think, for instance, if we could offer people a digital currency that is more convenient than cash, even safer than cash, like if someone steals cash from you, there's a way of getting it back. If it's highly traceable, you may be able to know what happened to it afterwards. I think there are trade-offs in life, and I think it would be particularly interesting for everyone involved to have a digital currency that is not 100% anonymous, that can be traced, but that also offers extra safety beyond the safety that cash can give you. I think my time is up, and we probably don't want to go out there. Thank you for your questions. Alfredo and Estefania are here to collect some more of those. We will be collecting them and publishing an official document answering them, so make sure to ask absolutely everything that you want to ask. They will be happy to share contact information with you so that we can maybe set up a round table between the UN and the industry and start clarifying some of these questions. Thank you very much.