{"id":38268,"date":"2021-03-03T15:28:31","date_gmt":"2021-03-03T13:28:31","guid":{"rendered":"https:\/\/forklog.com\/en\/?p=38268"},"modified":"2025-08-30T03:47:12","modified_gmt":"2025-08-30T00:47:12","slug":"lawyer-explains-how-the-cryptocurrency-taxation-bill-would-affect-its-holders","status":"publish","type":"post","link":"https:\/\/u1f987.com\/en\/lawyer-explains-how-the-cryptocurrency-taxation-bill-would-affect-its-holders\/","title":{"rendered":"Lawyer explains how the cryptocurrency taxation bill would affect its holders"},"content":{"rendered":"<p><span style=\\\"font-weight: 400;\\\">On 17 February 2021, the State Duma of the Russian Federation, in the first reading, approved the government <a href=\"https:\/\/u1f987.com\/en\/news\/draft-cryptocurrency-taxation-law-approved-in-principle-at-first-reading-in-russia\"><span style=\\\"font-weight: 400;\\\">bill on taxation of cryptocurrency transactions<\/span><\/a>.<\/span><!--more--><\/p>\n<p><span style=\\\"font-weight: 400;\\\">DeFi lawyer Mikhail Uspensky explained to ForkLog which provisions the bill introduces and who is likely to benefit from its passage.<\/span><\/p>\n<p>According to him, authorities decided to approach cryptocurrencies <span style=\\\"font-weight: 400;\\\">by the principle &#8216;an old horse won&#8217;t spoil the plough'&#8221;<\/span><\/p>\n<blockquote>\n<p><span style=\\\"font-weight: 400;\\\">\u201cIn other words, use methods that have been tested on more familiar foreign assets \u2014 offshore bank accounts and controlled foreign corporations,\u201d says Uspensky.<\/span><\/p>\n<\/blockquote>\n<p><span style=\\\"font-weight: 400;\\\">Cryptocurrency holders will be required to submit:<\/span><\/p>\n<ul>\n<li style=\\\"font-weight: 400;\\\" aria-level=\\\"1\\\"><span style=\\\"font-weight: 400;\\\">Notice of obtaining the right to dispose of digital currency, including through third parties. If not notified \u2014 a fine of 50,000 rubles.<\/span><\/li>\n<li style=\\\"font-weight: 400;\\\" aria-level=\\\"1\\\"><span style=\\\"font-weight: 400;\\\">A report on transactions and holdings of digital currency. Failure to notify or submitting a report with false information will incur a fine of 10% of the amount of inflows\/outflows.<\/span><\/li>\n<\/ul>\n<p><span style=\\\"font-weight: 400;\\\">Reports must be filed by 30 April of the calendar year following the year of transactions if the amount of inflows\/outflows of digital currency exceeds 600000 rubles.<\/span><\/p>\n<blockquote>\n<p><span style=\\\"font-weight: 400;\\\">\u201cGiven the market&#8217;s extreme volatility, this fate will befall a sizeable number of Russians,\u201d said Uspensky.<\/span><\/p>\n<\/blockquote>\n<p><span style=\\\"font-weight: 400;\\\">He also stressed that authorities used their usual regulatory tactic essentially retroactively:<\/span><\/p>\n<blockquote>\n<p><span style=\\\"font-weight: 400;\\\">\u201cThe first reporting period will be the current year 2021. One can hope that the bill will repeat the fate of its elder brother \u2014 the &#8216;On CFA&#8217; law \u2014 and spend several plenary sessions languishing in the first reading.\u201d<\/span><\/p>\n<\/blockquote>\n<p><span style=\\\"font-weight: 400;\\\">The lawyer also noted that if such deals yielded a profit, you must file a 3-NDFL tax return and then pay the tax to the budget by July 15.<\/span><\/p>\n<blockquote>\n<p><span style=\\\"font-weight: 400;\\\">\u201cTo stimulate the market, the fines are set at a maximum of 40% from the start, which may seem overly harsh and even somewhat inconsistent,\u201d he noted.<\/span><\/p>\n<\/blockquote>\n<p><span style=\\\"font-weight: 400;\\\">Under Russian law, Uspensky said, if the unpaid personal income tax (NDFL) for three financial years exceeds 2.7 million rubles, an individual may face criminal liability for up to one year. If it exceeds 13 million rubles \u2014 up to three years.<\/span><\/p>\n<blockquote>\n<p><span style=\\\"font-weight: 400;\\\">\u201cIt is encouraging that criminal liability for the mere fact of not notifying the tax authorities about possession of cryptocurrency was not introduced this time; however this &#8216;shortcoming&#8217; will likely be corrected by subsequent laws,\u201d the expert noted.<\/span><\/p>\n<\/blockquote>\n<p>Earlier, the Ministry of Finance proposed <a href=\"https:\/\/u1f987.com\/en\/news\/russian-finance-ministry-explains-criminal-penalties-for-undeclared-bitcoins\">to introduce criminal liability<\/a> for undeclared cryptocurrencies.<\/p>\n<p><span style=\\\"font-weight: 400;\\\">Russian citizens will be able to avoid paying tax on tokens if they held them for more than three consecutive years, said Uspensky.<\/span><\/p>\n<blockquote>\n<p><span style=\\\"font-weight: 400;\\\">\u201cHowever, only truly patient hodlers with nerves of steel will be able to take advantage of this,\u201d the lawyer says.<\/span><\/p>\n<\/blockquote>\n<p><span style=\\\"font-weight: 400;\\\">The method for determining the market price of cryptocurrencies should be set by the Federal Tax Service. Earlier, experts proposed <a href=\"https:\/\/u1f987.com\/en\/news\/experts-call-for-denying-the-russian-federal-tax-service-the-power-to-determine-the-market-price-of-cryptocurrencies\">to deprive the Federal Tax Service of this right<\/a>.<\/span><\/p>\n<blockquote>\n<p><span style=\\\"font-weight: 400;\\\">\u201cIn any case, citizens will not be able to carry forward losses from past years on their coins, because there is a direct prohibition in paragraph 2 of article 227 of the Tax Code. This is done for the benefit of citizens: to stimulate them to pay taxes more actively,\u201d the lawyer quips.<\/span><\/p>\n<\/blockquote>\n<p><span style=\\\"font-weight: 400;\\\">Earlier this year, the Constitutional Court of the Russian Federation confirmed the fairness of this approach in the <a href=\\\"https:\/\/legalacts.ru\/sud\/opredelenie-konstitutsionnogo-suda-rf-ot-25012021-n-148-o\/\\\" target=\\\"_blank\\\" rel=\\\"noopener\\\"><span style=\\\"font-weight: 400;\\\">ruling of January 28, 2021<\/span><\/a>, said Uspensky.<\/span><\/p>\n<p><span style=\\\"font-weight: 400;\\\">The expert believes big business stands to gain the most from the reforms:<\/span><\/p>\n<blockquote>\n<p>\u201cFirstly, cryptocurrency transactions will be exempt from VAT. Secondly, it will be recognised as non-amortizable property, allowing tax on the profit from the difference between purchase and sale price, and carrying forward losses from price declines into the future.\u201d<\/p>\n<\/blockquote>\n<p><span style=\\\"font-weight: 400;\\\">The new rules will apply only to a limited type of crypto assets, said Uspensky:<\/span><\/p>\n<blockquote>\n<p><span style=\\\"font-weight: 400;\\\">\u201cMany stablecoins will be outside forthcoming regulation. In declaring and paying taxes on these coins, the state will have to rely on the integrity of citizens and businesses, because given the high degree of confidentiality, it is unlikely that Russian tax authorities will be able to effectively identify violators at this stage.\u201d<\/span><\/p>\n<\/blockquote>\n<p><span style=\\\"font-weight: 400;\\\">Earlier, the Presidential Council for codification and improvement of civil legislation <a href=\"https:\/\/u1f987.com\/en\/news\/russian-cryptocurrency-taxation-criticised-over-terminology\"><span style=\\\"font-weight: 400;\\\">criticised the bill<\/span><\/a><span style=\\\"font-weight: 400;\\\"> for terminology issues.<\/span><\/p>\n<p><span style=\\\"font-weight: 400;\\\">Head of the State Duma Committee on Legislation, Pavel Krasheninnikov, noted that for introducing cryptocurrency taxation <a href=\"https:\/\/u1f987.com\/en\/news\/duma-says-cryptocurrency-legalisation-must-come-before-taxation\"><span style=\\\"font-weight: 400;\\\">it is necessary to legalize transactions with them<\/span><\/a><span>.<\/span><\/p>\n<p>Subscribe to ForkLog news on Telegram: <a href=\\\"https:\/\/t.me\/forklogfeed\\\" target=\\\"_blank\\\" rel=\\\"nofollow noopener\\\">ForkLog Feed<\/a> \u2014 the full news feed, <a href=\\\"https:\/\/telegram.me\/forklog\\\" target=\\\"_blank\\\" rel=\\\"nofollow noopener\\\">ForkLog<\/a> \u2014 the most important news and polls.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>On 17 February 2021, the State Duma of the Russian Federation, in the first reading, approved the government bill on taxation of cryptocurrency transactions.<\/p>\n","protected":false},"author":1,"featured_media":38269,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"select":"1","news_style_id":"1","cryptorium_level":"","_short_excerpt_text":"","creation_source":"","_metatest_mainpost_news_update":false,"footnotes":""},"categories":[3],"tags":[1451,1375,27,558],"class_list":["post-38268","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news-and-analysis","tag-bitcoin-regulation-in-russia","tag-lawyers","tag-russia","tag-taxes"],"aioseo_notices":[],"amp_enabled":true,"views":"17","promo_type":"1","layout_type":"1","short_excerpt":"","is_update":"","_links":{"self":[{"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/posts\/38268","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/comments?post=38268"}],"version-history":[{"count":1,"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/posts\/38268\/revisions"}],"predecessor-version":[{"id":38270,"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/posts\/38268\/revisions\/38270"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/media\/38269"}],"wp:attachment":[{"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/media?parent=38268"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/categories?post=38268"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/tags?post=38268"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}