Russian Government Approves Tax Amendments for Cryptocurrencies and Digital Financial Assets

The bill on DFA and cryptocurrency taxation heads to the State Duma in early May, says Alexey Yakovlev.

The bill on the taxation of digital financial assets (DFA) and cryptocurrencies will be submitted to the State Duma in early May. This was announced by the Director of the Financial Policy Department of the Ministry of Finance, Alexey Yakovlev, at the “Alpha Summit,” reports RBC.

The discussion concerns amendments to the Tax Code. On April 27th, they were approved by the governmental commission on legislative activities. The amendments accompany the main bill — “On Digital Currency and Digital Rights.”

What Will Change

The amendments affect four areas: VAT, personal income tax for individuals, a special tax regime for exchange-traded digital financial assets, and corporate profit tax.

Income from cryptocurrency transactions for individuals will be subject to personal income tax similarly to securities. Income and expenses from transactions with digital currency and digital rights will be allowed to offset within the tax period.

Brokers and trust managers making payments on such transactions will act as tax agents. For debt DFAs in the exchange market, loss carryforwards to future periods will be provided.

For companies, income and expenses from crypto operations (excluding mining) will be included in the overall tax base for profit tax. Periodic payments on debt digital financial assets will be equated to interest income on loans.

VAT will not be charged on services of digital depositories and exchanges, as well as on the sale of non-documentary foreign virtual rights certifying exclusively monetary claims.

For ruble-denominated debt DFAs of Russian issuers, a separate tax base and preferential rate will be introduced. In the case of over-the-counter buybacks of such assets, firms will be able to account for income and expenses if the transaction price is close to the exchange price.

Earlier in April, the Bank of Russia suggested criminal liability for unlicensed crypto exchanges. ForkLog spoke with experts about who might be affected by these measures if adopted.