The State Duma of the Russian Federation adopted a draft law on taxation of cryptocurrency. This led to the dissatisfaction of the owners of the digital currency, who will have to report for each transaction to the tax authorities of the country. Read more about the digital asset tax innovations below.
Financial Digital Assets: what you need to know
In accordance with the law of the Russian Federation, referred to in the code under the number 259-FZ, cryptocurrency belongs to property. All income from transactions carried out with it must be taxed. It is about paying taxes on profits or funds received by individuals.
If you rely on the aforementioned legislative act, digital financial assets are represented by digital rights. They allow you to carry out transactions with any securities, to take part in the capital turnover of non-public companies of shareholders.
These include any information in the virtual space that:
- performs the functions of a means of payment;
- acts as an investment;
- not provided with Russian rubles;
- not accompanied by international, foreign currency units.
Briefly about the main thing
Tax on digital assets must be paid by those who conduct transactions with cryptocurrency in the amount of more than 600,000 rubles per year. If the income is less from transactions, then there is no need to inform the state. In the event that the owner of the cryptocurrency did not provide the data, the tax authority received the right to fine him/her – 10% of the amount of the digital currency. We are talking about both the procedure for the receipt of funds and their withdrawal.
Referring to the new additions to the law, a fine of 50,000 rubles can be imposed on someone who has not notified that he/she has the rights to own the cryptocurrency. This must be done in a timely manner by the state.
The taxpayer needs to report at least 2 times in 3 years. This applies only to those transactions that provide for a turnover of more than 45,000,000 rubles. If such circumstances are not met, the offender may end up in prison, in accordance with a court decision – for up to 3 years. Penalties for refusing to pay tax on cryptocurrency can be 40% of its original amount.
How will tax authorities track violators?
Today it is still not clear how exactly it will be necessary to provide information to the tax office and how violators will be tracked. As you know, there is no way to control to whom the cryptocurrency was sent, and who performed the operation. Also, in the Russian Federation, this type of digital currency has not received permission to be used as payment for goods and services. Turning to the Prime Minister of the Russian Federation, Mikhail Mishustin, for an explanation of the law, the specialists managed to clarify some points. In his opinion, the adoption of the law allows the owners of a digital asset to expect that if illegal actions arise in their direction, they can rely on legal protection and defend property rights. Organizations and individuals who have the right to conduct transactions with cryptocurrency must follow the adopted amendments to the law, all sales and purchases transactions are subject to taxation. The innovations came into effect from the tax period of 2021. It should be reminded that in many countries, digital currency has long been recognized as property. In Russia, this concept is still vague, but the deputies are working on a law to resolve the situation. Experts expressed concern that the state and tax authorities simply will not be able to track many transactions, since the holders of large digital assets will remain in the “shadow”. To date, the deputies only made it clear that the document will be finalized for the second reading, and then the owners of the cryptocurrency will be able to better understand what awaits them in the future regarding the payment of taxes for the existing digital assets.