Taxation on Cryptocurrency in Russia - Is the Cryptocurrency Taxed

Taxation on cryptocurrency

Taxation And Cryptocurrency: Are There Taxes On Virtual Coins In Russia And Other Countries?


Taxes on crypto are always the subject of heated debate in the cryptocurrency community. Although cryptocurrency is at the center of a bear market today, its capitalization reaches $100 billion. That’s why it is not surprising that authorities are trying to control and tax crypto assets. 

Nowadays, the taxing of cryptocurrency is officially regulated only in 25% of countries. In the Russian Federation, digital coins are neither legalized nor prohibited. Nevertheless, the taxes on cryptocurrency 2020 exist and should be paid.

Taxes and cryptocurrency: legal aspects and how taxing rules work

Today, there is no specific legal regulation on cryptocurrency, mining, and taxing digital coins in Russia. However, more and more steps are taken to legalize them every year, and it seems new laws to control virtual assets will appear soon. 

Digital currency and tax fees: what the law says

The legal status of the cryptographic currency is unclear. Also, there is no universal procedure to pay taxes for foreign exchange payment transactions nowadays.

It is important to remember that investors should estimate the rate of tax payments on their own when they make transactions with digital coins. They also should include this information to their tax forms while reporting to tax authorities.

Inspectorate of Federal Tax Service confirmed that payments made by using of digital money are considered as a transfer of assets. This means you should pay tax fees if you are using crypto. 

Tax fees on cryptocurrency in Russia and other countries

Many miners want to know how to pay taxes on cryptocurrency these days. Generally, you can do it in many ways, but the following approaches are most common:

  1. VAT. You pay it while exchanging coins or using them to pay for goods and services.
  2. Personal income tax. If you receive a salary in Bitcoins, your profit should always be taxed. This type of tax payment is fully implemented in the United States.
  3. Income tax. Income received from operations with cryptocurrency is taken into account when you make income tax payments. The main goal of this approach is to force traders, in particular, pools for crypto miming and exchange services to pay taxes.
  4. Property tax. If Bitcoin is considered as property, its holders must inform their local tax offices about the purchase and then pay the property tax. In the United States, cryptocurrency coins are regarded as valuable assets, while in Australia, they are seen as property. Therefore, this approach can work differently in different countries.
  5. Capital gains tax. If digital currency is treated as a valuable asset, here is where capital gains tax starts to work. All Bitcoin holders who live in the USA, Germany, Spain and Australia pay capital gain tax on their digital currency.

Although there are no clear legal regulations on cryptocurrency in the Russian Federation, virtual coin holders are advised to contact their local tax officials to discuss mandatory payments.

How to pay taxes on crypto in Russia 2020

The legal status of cryptocurrency in the Russian Federation has not been defined by now. However, if you want to protect yourself from all potential problems with taxes while using crypto, you should bear in time a few important tips:

  • When you purchase cryptocurrency, you should get documents to verify the transactions. For example, you may sign a sales contract or create a receipt slip to confirm the transfer of funds.
  • When you sell coins, you should also prepare necessary documents to confirm the fact of transaction and the exchange of traditional money for crypto.
  • Make sure you include your cryptocurrency assets into your tax form (3-NDFL). There is no separate section for crypto in the form, so the information can be set in sections 1 and 2.
  • Completed forms should be submitted by April 30 of the year following the year in which the cryptocurrency transactions were made. You need to make tax payments in the tax office depending on the place of registration until July 15 of the same year.

Although digital currency is in the "gray" zone nowadays, authorities are working hard to create and implement new rules to regulate this sphere. This means that the residents of Russia will be aware of taxes on crypto and sanctions for tax evasion in the near future. 

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