On January 1, 2021, the law “On digital financial assets” came into force, and earlier, changes were made to the Civil Code related to cryptocurrency. Now it is recognized as property, it is forbidden to use it as a means of payment, but you can make transactions with it, writes RBC Crypto.
We are talking about the main changes in the current year and what can await Russians in case of non-compliance with the new rules.
How to file a tax return
This year, individuals declare only income from the sale of cryptocurrency. To do this, by April 30, you must file a tax return for 2020 with the tax authority at the place of registration (in person or by mail) or through the taxpayer’s personal account on the FTS website. It must reflect the income from the sale of cryptocurrency, subtract from this amount the costs of purchasing this cryptocurrency (even if it was purchased more than a year ago) and multiply the difference by the personal income tax rate of 13%. The tax must be paid by July 15, said Dmitry Kirillov, senior lawyer in tax practice at Bryan Cave Leighton Paisner (Russia) LLP.
Failure to submit a tax return
Responsibility for failure to submit a tax return entails the collection of a fine in the amount of 5% of the amount of tax unpaid within the time period established by the legislation on taxes and fees, for each full or incomplete month from the date set for its submission, but not more than 30% of the indicated amount and not less than 1000 rubles , explained Irina Murashenkova, an expert at Moscow Digital School.
What tax applies to transactions with cryptocurrency
According to the current legislation, cryptocurrency is equated to property, therefore, income from its sale is subject to personal income tax. In this case, a tax rate of 13% is applied, and from January 1, 2021, a 15% rate is applied on income exceeding 5 million rubles, explained Murashenkova.
The Ministry of Finance stated in its letters back in 2018 that the tax base for the taxation of transactions with cryptocurrency is the difference between the income from its sale and the cost of purchasing it. Liability has also been established for non-payment of tax, the amount of which, according to Art. 122 of the Tax Code of the Russian Federation can be 20% of the amount of unpaid tax, in the event of an unintentional act, and 40% of the amount of unpaid tax, if intent is established in the actions of the taxpayer.
In addition to collecting the amount of the fine as a sanction for the committed tax offense, the taxpayer must pay both the amount of tax and the amount of interest.
Criminal liability for tax evasion
If the unpaid amount of personal income tax for three financial years exceeds 2.7 million rubles, an individual may be held criminally liable for tax evasion (liability under Part 1 of Art. 198 of the Criminal Code of the Russian Federation – up to imprisonment for up to 1 year) … If the unpaid amount for three financial years exceeds 13 million rubles, this could lead to three years in prison, Dmitry Kirillov warned.
Ministry of Finance proposals to amend tax legislation
In the fall of 2020, the Ministry of Finance proposed amendments to the law “On Digital Financial Assets”, which propose to oblige cryptocurrency owners to provide tax authorities with information about receiving cryptocurrency, transactions with it, balances on digital wallets, if the amount of transactions for a calendar year exceeds the equivalent of 600 thousand rubles.
Miners and crypto exchangers will be required to submit information on transactions with cryptocurrencies to Rosfinmonitoring. For failure to submit information to the tax authority, the project provides for a fine of 50 thousand rubles, and for providing inaccurate information – a fine of 10% of the amount received or the amount of withdrawal of the cryptocurrency, while the larger of these two amounts will be applied to calculate the fine. For the failure of a taxpayer to submit to the tax authority more than 2 times within 3 years of the above information, the project provides for criminal liability in the form of imprisonment for up to 3 years, Murashenkova said.
Kirillov added that the law does not yet oblige to declare cryptocurrency, and the State Duma has just begun to consider bill No. 1065710-7 establishing this obligation. The law on digital financial assets, which came into force this year, only speaks of judicial protection in cryptocurrency disputes under the condition of their declaration (informing the tax authorities) in a manner not yet established.
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