The Russian parliament has tabled the law proposing to recognize cryptocurrencies as property. The proposed law provides legal protection for cryptocurrencies, but income from their activities is also subject to taxation.
Cryptocurrencies are considered property in Russia
The Russian State Duma, the lower house of parliament, passed a bill in first reading that recognizes cryptocurrencies as property and taxes their income at first reading, the RIA Novosti reported last week. The publication indicated that the document was presented to Parliament by Parliament on December 1, 2020.
The invoice suggests recognizing the digital currency as property for the use of the tax code. As Prime Minister Mikhail Mishustin stated earlier, this will allow the owner of the cryptocurrency to count on legal protection and defend their rights in court.
Prime Minister Mishustin spoke about the Russian government’s plans to recognize cryptocurrencies as property back in November when he unveiled initiatives, including cryptocurrency regulation, to combat the spread of the coronavirus pandemic.
The bill collects taxes on income from cryptocurrency activities. Russian citizens and organizations are required to make a statement if the value of cryptocurrency transactions during the year exceeds 600,000 rubles ($ 8,100 USD). In the meantime, the cryptocurrency is not being written off and transactions related to its circulation are not subject to VAT, according to the submitted publication.
Failure to pay or incomplete payment of the tax will result in a penalty of 40% of the amount owed. There will also be a fine for failing to file, filing early, or submitting a statement with inaccurate information.
Any violation of the declaration will result in a fine of 50,000 rubles. The Federal Tax Service is empowered to request bank statements from individuals that are used for cryptocurrency transactions.
The State Duma Committee on Budget and Taxes intends to clarify which crypto transactions are VAT exempt when the draft is finalized for second reading. It also defines the declaration requirements for the disposal of digital currencies and the submission of reports on transactions.
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