According to the new law, which came into force in early 2021, cryptocurrency income is taxed. Cryptocurrency in this case acts as property, so its use is not equated to monetary turnover. Taxation of cryptocurrency profits in Russia may scare off users who are somehow connected with the digital currency and earn income with it. Some experts express concerns about this, as they believe that the owners of cryptocurrency assets under the pressure of the Russian tax system will simply go into the shadows and transfer their business to other states, where the legislation is softer and more loyal to the turnover of cryptocurrency. And individual traders have already done just that. This has a negative impact on the Russian economy, since cryptocurrency is a lot of money that the budget simply loses by tightening the tax system.
According to the new legislation, the conditions for taxation of cryptocurrency in Russia are as follows.
- The income from the turnover of the cryptocurrency must be declared if it exceeds 600 thousand rubles per year.
- By April 30, you should submit a declaration to the fiscal authorities (by mail or bring it in person at the place of registration of the taxpayer), or use the electronic form and submit the declaration via the website of the Federal Tax Service.
- When accounting for the amount of profit, you need to take the entire amount of income, deduct the funds spent on the purchase of cryptocurrency, and multiply by the personal income tax interest rate. In this case, the rate is 13% of the income.
- It is important to consider the value of the cryptocurrency at the time of purchase, and not when filing a declaration.
- The tax on cryptocurrency in 2021 must be paid by 15.07.
It is worth noting that when calculating the amount of taxes, it is not important from which cryptocurrency the user received income. It also does not matter the type of earnings, if it is allowed in the Russian Federation. For example, a client could invest in bitcoin at a time when it was cheap, and at the moment exchange it for fiat, thereby earning a fair amount of money. Or work effectively on the stock exchange – trading is not prohibited by law, so the income from it is quite legal. The third, as yet unsettled method of earning money on cryptocurrency is mining. Obtaining cryptocurrency in this way is also still legal, but today experts are actively engaged in this issue. Every citizen who has received income from transactions involving cryptocurrencies must provide documentary evidence of the value of the coins at the time of the transactions. Such documents include a printout of statements from a cryptocurrency wallet that show the movement of cryptocurrency from and to the account, as well as a printout of the exchange rate of the cryptocurrencies and fiat money involved in the transaction at the time of its implementation. All this is attached to the third Personal income Tax form. If a taxpayer wants to cheat the system in any way and hide their income in cryptocurrency, they risk getting a fine. If the attempt to evade the filing of the declaration is not the first, the citizen may well be brought to criminal responsibility. To date, there are already several cases of legal proceedings due to non-payment of taxes for income from transactions involving digital currency. The maximum sentence that can be obtained for such behavior is 3 years. But even if the verdict of the court is in favor of a suspended sentence, the criminal record will still be registered, which will necessarily affect the life of a citizen. So it is more reasonable to accept the rules of the game from the state and pay taxes, than to reap the benefits of their bad faith.