Russian Finance Ministry proposes criminal liability for failure to declare cryptocurrencies

The Russian Finance Ministry has sent to agencies an updated package of documents regulating cryptocurrencies. The package discusses new penalties for crypto-asset holders, according to «Ъ», citing the documents.

Under them, holders of digital currencies would be required to report transfers and receipts to the tax authorities if the asset amount is equivalent to 100,000 rubles per year.

Failure by an individual to declare an amount exceeding 1 million rubles per year that passes through a crypto wallet would entail criminal liability of up to six months’ imprisonment or a fine of up to 300,000 rubles.

Failure to declare an amount of particularly large size (over 5 million rubles) carries a fine of up to 500,000 rubles or imprisonment for up to three years.

The Finance Ministry also proposes that foreign exchanges, brokers and other entities report quarterly to the tax authorities on Russians’ cryptocurrency transactions.

The updated documents have been sent by the ministry to concerned agencies, including the Ministry of Digital Development, Communications and Mass Media, the Interior Ministry, the Federal Tax Service, the Prosecutor-General’s Office, the Central Bank and others.

Earlier, the Ministry of Finance proposed to ban the circulation and issuance of cryptocurrencies, with the exception of their transfer by inheritance and enforcement in bankruptcy and enforcement proceedings.

Under the ministry’s proposal, the issuance and circulation of digital rights and digital currency that bypass Russia’s information infrastructure and are associated with substantial gains should be punished with a fine of up to 1 million rubles or imprisonment for up to four years.

Earlier, the Russian Union of Industrialists and Entrepreneurs recommended that the Ministry of Finance exempt from a 20% VAT the issuance, circulation and redemption of DFA and digital rights.

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