Legal

Russia’s Pushing Regulations For Crypto Industry By Proposing New Tax Requirements.

Russia’s enforcement agency – the Ministry of Finance is constantly pushing regulations for the cryptocurrency industry by proposing new tax requirements.

The ministry now reportedly desires to introduce illegal liability for failure to declare taxes on cryptocurrency, along with imprisonment terms of up to 3 years.

In line with a recent official report by Kommersant, the ministry proposes that the users who fail to report an amount of over 1 Mln Russian rubles [$13k] in annual cryptocurrency operations should serve a 3-year sentence or hard labor.

The ministry also proposed severe fines for smaller unreported amounts. As such, any physical or legal entity in Russia would need to report their annual cryptocurrency-related income if its amount exceeds 100k rubles [around $1,300]. Failure to report such amounts are subject to fines of 30% from the entire amount of cryptocurrencies held, but not less than 50,000 rubles [aroud $650 USD], the report adds.

The authority also proposes to need native cryptocurrency exchange services to report transactions on taxes quarterly.

As per Kommersant, the new proposals ask both Russia’s new cryptocurrency law “On Digital Assets” and therefore the upcoming bill “On Digital Currency.” Within the present version of the law “On Digital Assets,” Russian regulators don’t provide either taxation rates for crypto assets, or general rules to report those transactions.

It is not immediately clear what type of cryptocurrency transactions the ministry needs to tax, as the authority only recognizes a couple of ways to acquire cryptocurrencies.  Earlier in September, the ministry proposed a blanket ban on any cryptocurrency transactions apart from obtaining it via 3 methods: inheritance, bankruptcy as well as enforcement proceedings.

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