Guerrero Santana | Tax, Legal, Audit & Consulting



As mentioned in the introduction of this series, in 2008 was created a new form of currency, completely decentralised and open to all, without a central bank to control and manipulate as it happens today, without any group of elite people to make decisions that affect each person who uses his coins. The cryptocurrencies are the invention of technology that we now call “Blockchain” or chain of blocks, and that allows to keep a secure global book of transactions using timestamps, with high power of decentralised computational processing and cryptography.


From the above, we understand that cryptocurrencies do not depend on a central bank, so the management of their transactions and the issuance of money are carried out collectively by the users in the network.

Precisely that freedom of movement is what has troubled different governments because of the absence of provisions and mechanisms to regulate and limit the circulation of the crypto, which gave rise to the thought that they could be used by agencies dedicated to money laundering, drug traffcking, or financing of terrorism.

In September 2015, the Tax Administration Service issued a criterion regarding the use of virtual currencies in our country, based on Art.32 of the Federal Law for the Prevention and Identification of Operations with Resources of Illegal Origin, also known as “Anti-money Laundering Law”, which was far from regulating the correct operation of the aforementioned virtual coins.

Finally, the Fintech Law was published in March 2018. This innovative legal framework regulates financial technology institutions, mainly digital financial services and transactions, including those related to collective financing, online payments, and cryptocurrencies.

This law defines virtual assets as the value representation electronically registered and used by the public as a means of payment for all types of legal acts, and whose transfer can only be carried out through electronic means. It also specifies that virtual assets will not be considered legal currency in national territory, currencies or any other asset denominated in the legal currency.

Likewise, it indicates that financial technology institutions will only be able to operate with the virtual assets authorised by the Bank of Mexico (Banxico), and they must disclose to their clients the existing risks for holding transactions with virtual non-regulated assets.

However, the legal and fiscal legislation in Mexico has remained intact, so the tax treatment of the transactions regulated by this new Fintech Law must base themselves on the current tax laws.

The figure applicable to the exchange of goods or services by a cryptocurrency is that of the swap, which is regulated by Title 3 of the Federal Civil Code. Art.2331 considers the swap as a purchase-sale. Therefore, it could be considered for tax purposes as alienation of goods, which may result in the value added tax (VAT) and the income tax (ISR) for both parties involved, as we will discuss later. The value attributed in the swap will be that of the purchase-sale to determine the VAT base and the ISR.


First we would have to carry out an analysis of Title IV of the Income Tax Law (LISR) to determine according to which chapter the individual would have to pay the income generated by the operation in the cryptocurrency market, and could present two scenarios: tax in chapter II because it is a business activity, or in chapter IV because it is an alienation of goods.

A series of questions arise, since the law states that in the case of alienation of goods subject to the latter regime, those who acquire them must retain the equivalent of 20% of the sale price; however, the Financial Technology Institution does not acquire cryptocurrencies as assets and has them as an “inventory”, but acts precisely as an intermediary that transfers virtual assets to the corresponding market price, as a brokerage house dealing with shares. Consequently, the Financial Technology Institution could not, under current legislation, make any withholding of income tax (ISR), since it is not the acquirer.

In order to solve this situation, it would be reasonable to name the Financial Technology Institution responsible for informing the taxpayer regarding the profits and losses obtained during the year, so that the latter will pay the corresponding income tax (ISR), perhaps analogously to the applicable regime to the sale of shares that is made through the stock exchange.

It would also avoid that the plaintiffs and bidders of the virtual assets have to keep accounting for those operations, and issue Digital Tax Vouchers for Internet or Electronic Invoices (CFDI), while the Financial Technology Institution controls the information.

Within these legal systems, the case in which the contracting party is a person resident abroad should also be foreseen, for the Financial Technology Institution to correctly comply with the withholding obligation of the income tax (ISR), as the case may be.

For a moral person there would be no greater practical complication of comparing the purchase and sale price, and when determining a profit, pay 30% of the corresponding income tax (ISR).


The virtual assets would be taxed by the value added tax (VAT) at the general rate of 16%, focusing the discussion only on whether, as it is an intangible asset, the transfer is made within the national territory. For these purposes, it is considered this way when both the purchaser and the alienator reside in Mexico. In transactions as in the sale of shares in an established market, it is practically impossible to identify precisely which person sold and who bought, and in each case be responsible for transferring the tax.

The practical way to avoid any severe system complexity would be not to pay VAT from the sale of virtual assets, same as to what happens with the sale of equity interests or national and foreign currency.


The recent publication of Fintech Act clarifies the legal treatment of cryptocurrency, considering them as contributing virtual assets, so they are also regulated in tax matters. However, the Mexican tax system urgently needs to be updated since current fiscal provisions do not consider these type of transactions, nor do they address large digital companies that obtain substantial benefits without any physical presence in Mexico.

This update to the tax legislation should be aimed at standardising with the regime applicable to the shares traded on the stock exchanges and recognised markets, in which the intermediaries are imposed a series of obligations to keep track of information that allows the taxpayers to determine a net gain or loss in the operations, and to the authorities, to supervise said operations as well as participants.