Over the past two months, reports have begun to appear online that members of the crypto community in the Russian Federation are receiving notifications from the Federal Tax Service. There have even been allegations that the tax authorities have opened the hunting season on the crypto community and are demanding that they pay taxes on income from cryptocurrencies. Is this so and what should be done?
If you don’t file a declaration with the Federal Tax Service, will fines come later or can you continue not to pay?
From a legal point of view, it is necessary to comply with the law. If a subject has received income from cryptocurrency, he is obliged to pay tax on it and file a declaration. This is indicated in the Tax Code of the Russian Federation.
Does the tax office have tools to track the transactions of those members of the crypto community who have not filed a return?
The tax office does not yet have such a tool. However, it can obtain data from the subject’s current account to which the funds arrived after the exchange on a P2P platform or on a P2P exchange. The tax service may begin to ask questions about why the income was not declared, and the entity that received it will have to prove that it is not income.
What to do if the tax service does come for taxes on cryptocurrencies?
If the declaration is not filed, but the tax return still arrives, you must pay a fine for non-payment of taxes and for late filing of the declaration. Examples of fines:
A fine of 5% of the tax amount for each month of delay, but not more than 30% of the total amount and not less than ₽1000.
If the tax office can prove that the non-payment was committed intentionally, the fine will be 40% of the tax amount.
If the tax office requires documents, you can provide a list of transactions in Excel indicating the type of transaction, date, and name of the currency/coin, screenshots of orders from p2p/exchange, scans of bank receipts.
There is a 9 income code, it can be applied in the 3-personal income tax declaration - “income received from transactions with digital currency.”
Thus, it becomes obvious that the tax authorities may come and demand an account of their income from cryptocurrencies. Another issue is that the entire regulatory framework has not yet been created, especially in terms of regulating cryptocurrency mining. It is promised to be fully adopted by the end of this year.
The bill on the regulation of mining, which involves the legalization of the mining of cryptocurrencies and the declaration of income from this activity, will spell out liability for non-compliance, the head of the financial market committee of the State Duma of the Russian Federation, Anatoly Aksakov, said.
Author: Vadim Gruzdev, analyst at Freedman Сlub Crypto News