Russia’s parliament has advanced the bill that proposes to recognize cryptocurrencies as property. The proposed law will provide legal protection for cryptocurrencies but income from their activities will also be subject to taxation.
Cryptocurrencies to Be Considered Property in Russia
Russia’s State Duma, the lower house of Parliament, adopted a bill that recognizes cryptocurrencies as property and subjects income from them to taxation in the first reading, RIA Novosti reported last week. Noting that the document was submitted to the parliament by the government on Dec. 1, 2020, the publication detailed:
The bill proposes to recognize digital currency as property for the application of the tax code. As Prime Minister Mikhail Mishustin explained earlier, this will allow the owner of the cryptocurrency to count on legal protection and defend his rights in court.
Prime Minister Mishustin talked about the Russian government’s plans to recognize cryptocurrencies as property back in November when he outlined initiatives, including cryptocurrency regulation, to fight against the spread of the coronavirus pandemic.
The bill imposes taxes on income from cryptocurrency activities. Russian citizens and organizations will have to submit a declaration if the value of cryptocurrency transactions during the year exceeds 600,000 rubles ($8,100). Meanwhile, cryptocurrency will not be subject to depreciation, and transactions related to its circulation will not be subject to VAT, the publication conveyed.
For non-payment or incomplete payment of tax, there will be a 40% penalty of the amount owed. There will also be a fine for failure to submit, untimely submission, or submission of a declaration with inaccurate information.
For declaration violations, a fine of 50,000 rubles will be levied. The Federal Tax Service will have the authority to request individuals’ bank statements of accounts used for cryptocurrency transactions.
The State Duma Committee on Budget and Taxes intends to clarify which crypto transactions are exempt from VAT when finalizing the draft for the second reading. In addition, it will specify the declaration requirements for disposing of digital currency and submitting reports on transactions.
What do you think about Russia recognizing cryptocurrencies as property? Let us know in the comments section below.