The Federal Tax Service of Russia will not change the draft law on amendments to the Tax Code on the declaration of income in cryptocurrencies
Changes to the Tax Code are supposed to oblige citizens to declare transactions with cryptocurrencies. The Federal Tax Service is not going to change this paragraph of the bill even after criticism from experts.
On January 1, 2021, the Law on Digital Assets (DFA) entered into force in Russia, which spelled out the right (but not the obligation!) Of citizens to declare transactions with such assets. In February of this year, the State Duma in the first reading adopted a bill regulating the taxation of income from operations with cryptocurrencies. The document received negative assessments from experts, but the department does not plan to soften its position. In fact, after the adoption of the bill, the Ministry of Finance will have the opportunity to establish fines or criminal liability for failure to provide information about transactions with cryptocurrencies.
“The Tax Code of the Russian Federation should provide for exactly the procedure for informing. The draft federal law establishes such a procedure and does not interfere with voluntary reporting. Therefore, despite the fact that the bill was not developed in pursuance of Law 259-FZ, it fully complies with the provisions … and does not contradict it, “the Federal Tax Service said in a letter to ANO Tsifrovaya ekonomika.
As the Moscow Digital School teacher Dmitry Kirillov noted, the FTS in fact “replaces” the citizen’s right to inform the tax authority about transactions with cryptocurrencies established by the law on the CFA with “the right to report on obtaining the right to cryptocurrency, to submit reports on transactions with cryptocurrency and its balances”, which is tantamount to duty. And this directly contradicts the law on the CFA, Kirillov said.
At the end of September last year, the Ministry of Finance of the Russian Federation sent out a package of bills introducing the regulation of cryptocurrencies in the country, including the need to declare cryptocurrencies and transactions with them. Refusal to provide such information is subject to fines and, in case of large volumes of transactions, even criminal liability.
“Obviously, ordinary citizens who decide to experiment with crypt will be under the main blow, while professional attackers can easily bypass all restrictions using technical means of anonymization,” said Mikhail Uspensky, a member of the Russian Bar Association.
Experts warn that a tough stance on this issue could lead to the fact that companies working in the cryptocurrency field will start leaving Russia for other jurisdictions.
At the end of 2020, Anatoly Aksakov, Chairman of the State Duma Committee on the Financial Market, also spoke about the need to tax cryptocurrencies.