Experts record surge in Russians declaring cryptocurrency transactions

In recent months, residents of the Russian Federation have increasingly reflected income from cryptocurrency transactions in their declarations. This is reported by leading consulting and legal firms, as well as the Center for Strategic Developments, Izvestia reports.

PwC said that the increase in cases of the Federal Tax Service receiving information about cryptocurrencies may be linked to the passage of the law “On Digital Financial Assets,” the tax authorities’ attention to Russians’ foreign assets, and foreign banks’ requirements to confirm clients’ sources of income.

According to experts, some are attempting to “whitewash” income from cryptocurrency deals, as the tax service can track them. Especially when fiat money is involved in the deal — any cashless operations are recorded and the tax authorities have access to this information, even if deals are conducted abroad. This is possible thanks to the law on automatic information exchange.

The current framework for exchanging financial data does not include information on cryptocurrency transactions, but in the future they are likely to be included in automatic information exchange, according to KPMG.

FTL Advisers partner Maria Kukla noted that it is too early to speak of a mass trend of Russians declaring cryptocurrency transactions—by the end of the month the declaration deadline expires on May 1, and for now most investors are taking a wait-and-see stance.

The Federal Tax Service also stressed that the declaration campaign is not yet finished and its results will be announced later.

As reported in February, the State Duma adopted a draft law on the taxation of cryptocurrency transactions in its first reading.

Ahead of the second reading the bill did not undergo significant changes and provides for the obligation of citizens to inform the Federal Tax Service of ownership of digital assets.

A ForkLog lawyer explained what provisions the bill introduces.

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