Instructions for paying taxes on cryptocurrency in Russia

From January 1, 2021, cryptocurrency is recognized as property in Russia. This allows you to officiallymake deals with her.Russians have this opportunity thanks to the law “On Financial Digital Assets,” which came into force at the beginning of this year. However, the document prohibits the use of cryptocurrencies as a means of payment, writes RBC Crypto.

In early August it became known thatRosfinmonitoring ordered the creation of a module for monitoring cryptocurrency transactions. One of its tasks is to analyze the behavior of market participants in order to identify them. For Russians who conduct cryptocurrency transactions, this is another signal that the state is taking control of the cryptocurrency sphere, said Efim Kazantsev, a teacher at the Moscow Digital School.

"Taxes on cryptocurrency must be paid without any warnings, since this is provided for by the current Russian legislation"- added the expert.

Some entrepreneurs, taking advantage of the fact thatthe cryptocurrency is de facto not regulated by Russian laws, they have already begun to pay salaries in digital assets, says Yuri Brisov, a member of the Commission on Legal Support of the Digital Economy of the Moscow Branch of the Russian Lawyers Association. According to him, Rosfinmonitoring will be able to monitor these and other illegal operations with cryptocurrencies that violate the law "On CFA".

“Tracking operations in cryptocurrency is correct. This is not new, it is done in other countries. Illegal tax evaders should ponder ", - said Brisov.

According to the lawyer, the problem lies precisely in the factthat the use of cryptocurrency as a means of payment is prohibited in Russia. If digital assets could be used for payment, then in this case it is possible to establish clear KYC / AML criteria for exchanges, withdraw funds to a bank account and calmly pay taxes, Brisov explained.

How to legally use cryptocurrency in Russia?

Operations with cryptocurrency are able to bringincome to be included in the tax base. For example, when selling digital assets for fiat currency, income is generated that can be measured in monetary terms, which means it is potentially taxable, explained Eduard Davydov, partner of NOA Circle Russia.

In the explanations of the Ministry of Finance it is said that the taxthe base for personal income tax on transactions of purchase and sale of cryptocurrencies is defined in rubles as the excess of the total amount of income received by the taxpayer in the tax period from the sale of cryptocurrency over the total amount of documented expenses for its acquisition, the expert noted.

"It follows from this that when receiving income from the sale of cryptocurrency, you must independently calculate personal income tax and submit a tax return (form 3-NDFL)"- added Davydov.

The current Russian legislation does not provide for special liability specifically for situations with cryptocurrency, Kazantsev explained. According to him,liability for tax evasion will be incurred according to general rules... These are fines and penalties provided for in the Taxthe Code of the Russian Federation, as well as Articles 198 and 199 of the Criminal Code of the Russian Federation, which provide for various types of criminal liability, including imprisonment for a maximum of 6 years, a teacher from the Moscow Digital School warned.

Instructions for paying taxes on cryptocurrency

According to Davydov,at the moment there are no special rules for taxation of transactions with cryptocurrency in Russia, whereby the declaration of applicable taxes should be made in the general manner:

• Step 1. During the reporting period (annually until April 30), all receivedincome from the sale of cryptoassets... To do this, you need to download the available reports on exchanges, exchangers, p2p platforms, as well as statements from bank cards and / or accounts with which you purchased and sold cryptocurrency;
• Step 2. The income received from each crypto asset must be correlated with the expense that you incurred to acquire it in the same amount, that isthe unrealized part of the currency does not need to be included in the calculation... All calculations must be made in rubles.If you sold and / or bought cryptocurrency on the exchange for foreign currency, then you should recalculate income and expenses twice according to the cross rates on the dates of the transactions until you finally get the total in rubles;
• Step 3. For those positions where the profit value is greater than zero, it is necessaryfill out a declaration in the form 3-NDFL. There are several ways to do this, allthey are described on the official tax website: nalog.gov.ru. There are a number of important points when filling out the declaration. Considering the emerging practice in the circulation of cryptocurrencies, the sale of, for example, Bitcoin should be declared as follows:sale of "other property";
• Step 4... Based on the results of a desk audit by the tax authority of the submitted declaration (the result can be found in the taxpayer's personal account) - pay the amount of tax approved by the tax authority.

It should be borne in mind that in the absencedocumentary evidence of the purchase of a cryptocurrency (for example, in the case of a purchase "from hand" for cash), the tax authorities may refuse to record the costs of its acquisition for personal income tax or other applicable taxes, that is, the tax will be charged on the entire amount of the sale of cryptocurrency, warned the partner of NOA Circle Russia.

Where is it more profitable to buy cryptocurrency? TOP-5 exchanges

For a safe and convenient purchase of cryptocurrencies with a minimum commission, we have prepared a rating of the most reliable and popular cryptocurrency exchanges that support deposits and withdrawals of funds inrubles, hryvnias, dollars and euros.

The reliability of the site is primarily determinedtrading volume and number of users. By all key metrics, the largest cryptocurrency exchange in the world is Binance. Binance is also the most popular crypto exchange in Russia and the CIS, since it has the largest cash turnover and supports transfers in rubles from bank cardsVisa / MasterCardand payment systemsQIWI, Advcash, Payeer.

Especially for beginners, we have prepared a detailed guide: How to buy bitcoin on a crypto exchange for rubles?

Rating of cryptocurrency exchanges:

#	Exchange:	Website:	Rating:
1	Binance (Editor's Choice)	https://binance.com	9.7
2	FTX	https://ftx.com	7.5
3	Bybit	https://bybit.com	7.2
4	OKEx	https://okex.com	7.1
5	Exmo	https://exmo.me	6.9

The criteria by which the rating is set in our rating of crypto-exchanges:

• Work reliability— stability of access to all functions of the platform, including uninterrupted trading, deposits and withdrawals of funds, as well as the duration of the market and daily trading volume.
• Commissions– the amount of commission for trading operations within the platform and withdrawal of assets.
• Feedback and support– we analyze user reviews and the quality of technical support.
• Convenience of the interface– we evaluate the functionality and intuitiveness of the interface, possible errors and failures when working with the exchange.
• Platform Features– availability of additional features — futures, options, staking, etc.
• final grade– the average number of points for all indicators determines the place in the ranking.

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