The bill with recently developed amendments to the Tax Code will be considered in the second reading. The innovations will directly affect the owners of cryptocurrencies, who will be obliged to provide information about their cryptoassets .
This change is at odds with the existing law on digital financial assets (DFA), in which this declaration is spelled out as a citizen’s right.
The new initiative comes from the Federal Tax Service, and the position of the regulator is reflected in a letter sent by the department to the State Duma:
“The Tax Code of the Russian Federation should provide for exactly the procedure for informing. The draft federal law establishes such a procedure and does not interfere with voluntary reporting. Therefore, despite the fact that the bill was not developed in pursuance of Law 259-FZ, it fully complies with the provisions … and does not contradict it. «
Experts agree that the FTS, by its decision, is changing the right established by the law on the CFA to «inform the tax authority about the possession of cryptocurrency and about transactions with it» with the right to «report on obtaining the right to cryptocurrency, submit reports on transactions with cryptocurrency and its balances» … This is tantamount to a duty, and provides for the penalty for non-performance in the form of a fine.
Worst of all, this approach makes it possible to criminalize non-disclosure of information. In addition, this precedent empowers the FTS to issue a separate letter describing the procedure for determining market prices for digital currency, but this is one of the most controversial issues that tax authorities in many countries have been fighting over for several years.
If the amendments are adopted, the first to fall into the sights of the tax authorities will not even be traders, but ordinary people who decided to try cryptocurrency and bought it using bank cards.
Expert comments on the tax on cryptocurrency in Russia
Income from operations with cryptocurrency is proposed to be levied with personal income tax (PIT) or income tax, while there is no value added tax (VAT).
For failure to provide data, the tax authorities will be able to fine violators by 10% of the amount of digital currency write-off or the amount of digital currency received by the person who controls it.
Also, the deputies propose to establish a fine of 50 thousand rubles for individuals and organizations that did not provide information on obtaining the right to dispose of digital currency within the specified timeframe, including from third parties.
«The new law complicates the circulation of cryptocurrency in Russia»
Yuri Brisov, member of the Commission for the Legal Support of the Digital Economy of the Moscow Branch of the Russian Lawyers’ Association.
The lawmaking activity of the Federal Tax Service in terms of the force of pressure can only be compared with the activities of the ruler of ancient Athens Drakont. First, the concept of presumption of taxpayer guilt was approved, according to which any person is considered not to have paid tax until proven otherwise. Another logical, but no less grandiose step towards erosion of the usual pillars of law is the imputation of property. In accordance with this innovation, any person can be considered the owner of cryptocurrencies until they prove otherwise.
This is the main complaint about the bill, there are many details: it does not take into account the methods of obtaining cryptocurrency, for example, mining, inheritance, donation, chance. Volatility is not taken into account. Ignored transactional mobility (the ability to hold hundreds of currencies in the wallet at the same time) and much more.
It is difficult to say whether this bill will be adopted, which by the way does not coincide in many respects with the provisions of the previously adopted law «On CFA». In one, these two documents are similar – both documents absolutely complicate the legal circulation of cryptocurrency in our country.
De facto, the participants in the economic turnover have a choice:
- either stay as far away from blockchain technology as possible;
- or completely operate outside the law.
«The law requires unambiguous revision»
Expert of Moscow Digital School Irina Muraschenkova.
The bill on amendments to the tax code was adopted in the first reading and at the same time caused a flurry of criticism, in my opinion, quite justified. For a long time, the law on digital financial assets was discussed and adopted, but even after its adoption, many issues of regulating cryptocurrency remained unresolved, in particular, in the presence of a direct prohibition on the use of crypto as a means of payment for TRU (goods, works, services), there are no legal rules for issuing and circulation of cryptocurrency, but transactions using cryptocurrencies are possible, the rights of the parties to such transactions are protected by law.
That is, it seems to exist, but at the same time it is not legally in the quality that makes it so attractive.
In such circumstances, it would be advisable to focus on eliminating the existing gaps, and to resolve the issues of taxation of cryptocurrency and tax control gradually. The position of the Federal Tax Service outlined in the letter on the determination of the market value of digital assets, in my opinion, does not stand up to criticism. The authors lack understanding of the essence and specifics of cryptocurrency.
It should be noted that the question of determining the cost of CFA can be safely attributed to one of the most controversial. The problem is closely related to the monetary value of the CFA in a particular period. I believe that the position of the Federal Tax Service, set out in the letter “we will tell you what it costs and how much,” looks unfounded.
At one time in the MO AYR, when discussing this issue, at least three options for determining and reflecting the cost of CFA were considered:
- the rate of a specific digital coin to BTC at the internal rate of an electronic wallet or exchange account, subject to corporate verification by a legal entity, and so on;
- the BTC rate to the US dollar established by the Russian Association of Cryptocurrencies and Blockchain (RACIB) as an industry community in the Russian Federation;
- the official exchange rate of the US dollar against the ruble, established by the Bank of Russia.
So the question is complex and requires a more balanced approach.
Similarly, the letter from the Federal Tax Service of the Russian Federation regarding the receipt of bank statements on transactions with the CFA confirms that in this part the authors of the answer ignore the provisions of tax legislation, which does not contain the wording “there are no signs of a possible violation of tax legislation”. «Vague doubts» cannot be the reason for the actions of the tax authority set out in the draft.
In my opinion, the bill requires unambiguous revision and in the form in which it passed the first reading, it cannot be adopted. Otherwise, it is better to immediately admit that we do not have a goal to regulate the turnover of cryptocurrencies, but the task is to complicate this turnover as much as possible. Probably, the risks of using cryptocurrencies «for other purposes» are so frightening that it is easier to ban than to create comfortable conditions for legal and conscientious users in their country. Well, they will go where it is better.