Russian Finance Ministry Proposes New Amendments to Law on Crypto Assets

Russia’s Ministry of Finance has proposed new amendments to the country’s new law on crypto assets. The draft bill could soften the requirements for cryptocurrency taxpayers, according to Thursday’s press release.

November 12, 2020 | AtoZ Markets – Owners of digital currencies face up to three years in prison if they do not report to the tax authorities on transactions in the equivalent of 45 million rubles or more. This requirement is contained in the new version of the amendments of the Ministry of Finance of the Russian Federation to the Criminal and Criminal Procedure Codes.

Crypto asset reporting no later than April 30, 2022, Russain Finance Ministry

Individuals and organizations must report to the Federal Tax Service on the receipt of digital currency, transactions with it, and balances in the crypto wallet if the amount of transactions exceeds the equivalent of 600,000 rubles  (about $7,800) in a calendar year.

The calculation is made at the market price of the digital currency on the date of each transaction. The procedure for determining the market price must be established by the Federal Tax Service.

According to the Ministry, the ownership of crypto assets must be reported no later than April 30, 2022. Crypto exchangers and miners must send information about transactions with digital currencies to Rosfinmonitoring.

Fines for undeclared cryptocurrencies

A fine of 50,000 rubles is will be imposed for violation of the reporting deadline. For false information – a fine of 10% of the largest of the two amounts in ruble equivalent (the amount of receipt or the amount of digital currency withdrawal).

Failure to pay or incomplete payment of tax on income from digital currency transactions results in a penalty of 40% of the unpaid tax. To comply with the general principles of legal regulation, digital currency is recognized as property.

If the owners of crypto assets for three years more than two times did not provide data to the tax authority or included deliberately false information in the report, then this entails criminal liability:

Related: Russia Mandates Civil Servants to Declare Crypto Holdings Starting 2021

  • For undeclared transactions with digital currency in the amount of 15 million rubles over three years, the fine will be up to 300,000 rubles.
  • If in three years transactions are made in the amount of 45 million rubles or more, asset owners face a fine of up to 2 million rubles or imprisonment for up to three years.

Administrative fines for organizing illegal circulation of digital assets and violation of the rules for making transactions with crypto assets:

  • for citizens will be up to 500,000 rubles;
  • for officials – up to 1 million rubles or disqualification for a period from six months to one year;
  • for legal entities – up to 2 million rubles.

If digital currency was used as a means of payment for goods or services, then a fine of up to 200,000 rubles is imposed on citizens, 400,000 rubles on officials, and up to 1 million rubles for legal entities. In all these cases, digital currency is withdrawn.

The Ministry of Finance also developed amendments to the Tax Code, anti-money laundering (AML) legislation and the Code of Administrative Offenses in terms of regulation of digital currencies and digital financial assets (DFA).

New amendments would affect unscrupulous players

Let us remind you that the Russian Ministry of Finance presented the first amendments to the law “On CFA” in early September.

They prohibit the circulation and release of cryptocurrency, with the exception of its inheritance and collection within the framework of bankruptcy and enforcement proceedings. It is not allowed to receive digital currency as a mining reward.

Read also: Bank of Russia Limits Bitcoin Purchase for Inexperienced Investors

Alex Axelrod, CEO of fintech company Aximetria, praised the amendments, believing that their implementation would lead to the exodus of unscrupulous players.

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