Russians May Have To Disclose Crypto Holdings Above $1,300
Russians with crypto holdings above $1,300 must disclose their addresses, balances, and trading history to tax authorities lest they risk forced labor or up-to three years in jail. This is if the latest crypto draft rules by the Ministry of Finance (MoF) is adopted.
New Draft Laws in Russia Classifies Crypto as Property and Proposes Taxation
As per RBC news on Sept 24, the MoF prepared a package of new bills. These draft laws will obligate citizens to disclose their cryptocurrency holdings, wallet addresses, and their transaction history for owners with over 100k Rubles, or $1,300, to tax agencies.
Strangely, the Russian MoF considers digital assets as tools of money laundering and tax evasion.
Notably, the package of bills also classifies digital assets as property. As such, Russia will tax profits while cryptocurrency exchanges will have to report fund transfers and crypto transactions initiated by natives to authorities.
These new rules are in response to changes in the Criminal and Criminal Procedure Codes, the Code of Administrative Offenses, the Tax Code, and the Law on Combating Legalization (Laundering) of Incomes.
Will these Draft Rules Pass to Become Law?
Dmitry Kirillov, a senior lawyer at Bryan Cave Leighton Paisner in Russia, believes the mix-up in the bills’ wording could bear negative consequences on culprits.
For instance, there is a mix up between the concept of digital currency and digital rights, the two of which are distinct under Russian laws. Details on how cryptocurrency exchange owners should report to tax authorities also remain fuzzy.
Efim Kazantsev, the Moscow Digital School expert, thinks the Ministry of Finance proposals are tough. To some extent, it may not find support:
“There is a likelihood that this overly tough initiative of the Ministry of Finance will not be supported, but there are not many chances for this. Most likely, in one form or another, the obligation to declare cryptocurrency will be fixed.”
“This means that everyone who does not plan to tell the tax authorities about the sources of its origin and the reasons for non-payment of taxes should think about converting digital currency into something else.”
Earlier, BTCManager reported of Russia’s parliament receiving bills that propose imprisonment and fines for illicit crypto activities.