Honduras’ Roatan Island special economic zone (SEZ) known as Próspera ZEDE, has officially recognized Bitcoin (BTC) as a unit of account for financial transactions. This decision, announced by Jorge Colindres, technical secretary and tax commissioner of the SEZ, aims to provide more financial and monetary freedom for individuals and entities.
Financial Liberation
According to Colindres, “People should be free to carry out transactions, do their accounting and report taxes in the currency of their free choice.” This recognition of Bitcoin as a unit of account allows Próspera ZEDE to uphold this principle and empower entities operating within the zone.
Conditions for Adoption
Colindres outlined the conditions for legal entities interested in adopting Bitcoin as a unit of account. The statement from Próspera ZEDE explains that “(e)Resident legal entities organized or registered under the authority of the Prospero Entity Registry Statute” have the right to use Bitcoin as their unit of account. Entities must file a notice with the Tax Commissioner within thirty days of the tax period and reference an approved major cryptocurrency exchange like Kraken or Coinbase.
- Entities must file a notice within thirty days of the tax period
- The notice should reference an approved major cryptocurrency exchange
Colindres also addressed the deadline for applying Bitcoin as a unit of account for the 2024 tax year, which is set for 30 January. Due to technical limitations and external regulatory issues, the implementation of the “Final BTC Tax Payment Procedure” has been temporarily delayed. However, entities that choose Bitcoin as their unit of account must still determine tax obligations in reference to BTC for internal accounting purposes and report them in US dollars or the local currency, Lempira, to Próspera ZEDE. Colindres stated that entities will be able to report their tax obligations in Bitcoin once these issues are resolved.
Bitcoin Adoption in Próspera ZEDE
Próspera ZEDE, located on Roatan Island, is a special economic zone focused on tourism. In 2022, the SEZ embraced Bitcoin as a legal tender, allowing businesses and individuals to use it for transactions within the zone. Furthermore, Próspera ZEDE enables municipalities, local governments, and international firms to issue Bitcoin bonds within its jurisdiction.
The Central Bank of Honduras expressed its inability to vouch for cryptocurrency transactions following the announcement. This move by Honduras follows the lead of its neighbor, El Salvador, which became the first country to adopt Bitcoin in September 2021.
