Black_background_logo_BitcoinWorld-removebg-preview
Blockchain News

Russian Tax Body Allows Citizens to Declare Crypto Earnings for Taxes

In a surprising move, the Russian Federal Tax Service (FTS) has stated that citizens can pay taxes on their cryptocurrency earnings, despite the lack of legal status for tokens in the country. This announcement comes amidst a mixed stance from the government on cryptocurrencies, with the Central Bank favoring a ban similar to China’s approach, while other ministries express a desire to legalize and regulate digital assets.

The FTS provided two methods for declaring crypto profits. Individuals can either include their earnings on their personal income tax declarations or utilize the simplified taxation system (STS). It is important to note that cryptocurrencies currently have no legal standing in Russia, leading to an ongoing deadlock between various government bodies.

The situation is further complicated by the sanctions imposed on Russia by the United States and its allies. As a result, some Russian companies are turning to cryptocurrencies to de-dollarize and facilitate trade. In response to the complex landscape, the finance ministry proposed a compromise that would essentially restrict crypto handling to miners only, excluding the majority of the population.

However, the FTS has presented another perspective. It acknowledges that cryptocurrencies do not have a defined legal status but argues that they can be recognized as a form of property and should be declared as such on tax returns. Russian courts have previously ruled that crypto can be protected as intangible property, falling under existing property rights. The FTS advised that taxes should be calculated in fiat rubles and suggested that traders submit a declaration using existing documents by April 30, 2024. Additionally, those opting for the STS can calculate their earnings by determining the difference between their sales income and the purchase price of the cryptocurrency.

Despite the uncertainty surrounding the legal status of cryptocurrencies in Russia, the FTS’s position aligns with previous court rulings and provides individuals with a means to declare their crypto earnings for tax purposes. As the debate continues, it remains to be seen how the Russian government will ultimately regulate and integrate cryptocurrencies into its legal framework.

 

Crypto products and NFTs are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions. Crypto is not a legal tender and is subject to market risks. Readers are advised to seek expert advice and read offer document(s) along with related important literature on the subject carefully before making any kind of investment whatsoever. Crypto market predictions are speculative and any investment made shall be at the sole cost and risk of the readers.