Russia recently announced that it would include cryptocurrencies in its tax laws. The country had completed its first series of considerations in February. Following are details of how the tax code could look.
The past few months have seen a duel between Russia’s central bank and the country’s Ministry of Finance about digital assets regulations. While the finance ministry seeks to regulate the virtual assets industry, the country’s central bank seeks to effect an outright ban on all cryptocurrency activities, including mining and trading activities.
Cryptocurrency enthusiasts within and outside the country have carefully observed every step of the standoff as the outcomes of their decisions directly affect all industry players.
However, reports say that both organizations also negotiated to amend the country’s tax policy to include virtual assets. These emerging talks within the government on making virtual assets taxable include the following details.
Proposed Tax Percentages for Organizations and Individual Holders
The proposed code pegs the income tax levy for individual holders at 13%, while corporate organizations within the industry are to pay an income tax levy of 20%. A member of the country’s parliament informed the press on the 7th of April that he expects the parliaments to complete the amendments towards the end of the legislature’s summer sessions.
Moreover, the regulation also mandates digital assets holders to inform the government about crypto deals that exceed 600,000 Russian rubles (about $7,400) annually. The code additionally stipulated that failure to report such transactions would attract a fine that could reach 40% of the entity’s tax.
Speaking about the delay in the bill’s prosecution, the said representative of the country’s parliament said the parliament has to face an urgent task of creating an “anti-crisis” regulation.
Different concerned players in the cryptocurrency industry await the result of the regulation between the Finance Ministry and the central bank. The governing bank maintains its stance to outlaw the entire crypto industry—including the possibility of any tax amendments in such regard.
Nevertheless, current statistics place potential earnings for the country via crypto tax range between 120 million USD to 250 million USD. Individual holders would pay an income tax of 13%, while corporate investors would pay 20% on their earnings.
Reports also say that the tax code includes a minimum tax deduction of 52,000 rubles for digital asset investors. However, the regulation’s probability of addressing assets obtained before 2022 is low.
Russian Governing Bank Advocates for Digital Fiat Money
Meanwhile, Russia’s central bank recently advocated for a digital Ruble for its economy. Information from a senior representative of the bank says the country intends to test digital fiat money before the end of 2022.
Earlier in January, the central bank announced that it had executed successful deals with its digital currency in a pilot. Reports say that a minimum of twelve financial services companies are involved in the tests, which would continue for the rest of the year.
The virtual ruble is the subsequent adaptation of the country’s fiat money, after paper and electronic cash. Different persons within the country have reportedly called for a diversion to virtual assets to circumvent global sanctions against Russia for invading Ukraine.