On February 17, the Russian State Duma, in the first reading, approved in principle the законопроект on taxing cryptocurrency transactions.
The document was supported by 375 deputies. 13 abstained.
The draft “On Amendments to Parts One and Two of the Tax Code of the Russian Federation” recognises digital currency as property and taxes income from operations with it under corporate income tax or personal income tax (PIT).
In its current version, the document requires individuals and legal entities to report to the tax authorities on holdings of digital currencies if the amount of inflows or outflows in the year exceeds the equivalent of 600,000 rubles. The amount of the operation is calculated based on the market price of the currency.
For late provision or submission of inaccurate information in the report on digital currency operations and its balances, a penalty of 10% of the larger of the two sums — inflows or outflows of digital assets — applies.
For failure to notify the tax authorities within the prescribed period about receipt or operations with cryptocurrency, a fine of 50,000 rubles is imposed.
In case of non-payment or underpayment of tax on digital currency operations, the penalty will be 40% of the unpaid tax amount.
Holding cryptocurrencies in itself does not entail tax consequences for individuals and legal entities, provided they do not undertake any operations with the assets.
Update: Ahead of the second reading, the Russian Finance Ministry may consider the possibility of снижения лимита for taxation of cryptocurrency transactions.
Earlier the Legal Department of the State Duma sent the tax amendments for revision due to arbitrary fines, and the Codification Council did not support the bill due to terminology issues.
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