January 26, 2021

Is it necessary to pay taxes on cryptocurrencies. Explain it in plain language

After the quarantine in Russia, the number of tax inspections quadrupled. What to do for digital holders money, and how the situation will change in the fall.

Tax authorities began to massively check the accounts of Russiansin banks after the lifting of restrictions imposed due to the coronavirus infection COVID-19. The Association of Banks of Russia (ADB) informs that the Federal Tax Service is interested in information "on the availability of accounts, on the availability of funds in the accounts of all categories of clients," including individuals, writes "RIA Novosti".

FTS inspections were suspended from April 1 to 30June, but now the number of requests has increased more than 4 times, and banks do not have time to process them in full, the ADB said. The Federal Tax Service explained this dynamics by the resumption of tax audits after a long period of restrictions.

Currently not valid in Russiacryptocurrency regulation, however, on July 31, President Vladimir Putin signed the law "On digital financial assets", which will enter into force on January 1, 2021. Therefore, the regime of taxation of income from operations with cryptocurrencies remains the same, explained Dmitry Kirillov, senior lawyer of tax practice Bryan Cave Leighton Paisner (Russia) LLP, lecturer at Moscow Digital School.

If it is not followed by the beginning of next yearchanges in tax legislation, income from transactions with cryptocurrencies will be taxed according to the general procedure: income from sale minus acquisition costs, the difference is taxed at a rate of 13% for residents (from next year 15%, if income exceeds 5 million rubles, according to an increased the rate is subject to the amount exceeding this threshold). The expert added that this taxation procedure has been repeatedly explained by the Russian Ministry of Finance.

Member of the Commission on Legal Support of DigitalEconomics of the Moscow Branch of the Russian Lawyers Association, Head of the Russian Center for Competence and Analysis of OECD Standards RANEPA under the President of the Russian Federation Antonina Levashenko emphasized that it is necessary to pay taxes on transactions with cryptocurrency in Russia. However, this process is still uncertain.

“If in OECD countries it is the tax authorities inamong the first (along with the financial intelligence units) they gave detailed explanations about the consequences awaiting those who exchange cryptocurrencies for fiat currency, purchase goods or services for virtual currencies, receive a salary in bitcoins, etc., then in Russia even the adoption of the law on CFA has not removed the uncertainty over the tax implications of using cryptocurrencies. Now that the law on CFA has been passed, the community has to wait for a more detailed position of the competent authorities on tax issues. Although this could have been done before the adoption of the law, and much earlier, "Levashenko explained.

The Law "On Digital Financial Assets" givesdefinition of bitcoin and other cryptocurrencies, and also prohibits the use in the country as a means of payment. According to the document, in Russia it will be possible to legally buy, sell and perform other transactions with cryptocurrency. Also in the law there is a reference to separate documents that will regulate mining, the organization of the issue and circulation of digital currency.