Moscow law office "Kovalev Tugushi & partners"


The New Federal Law No. 34-FZ of 18.03.2019 "On Amendments to Parts One, Two and Article 1124 of Part Three of the Civil Code of the Russian Federation" introduced Article 141.1 into the Civil Code, which establishes the concept of "digital rights", which means: "named as such in the law of obligations act and other law, the contents and terms of which shall be determined in accordance with the rules of the information system conforming to the law of signs".
On January 1, 2021, The New Federal Law No. 259-FZ of 31.07.2020 "On Digital Financial Assets, Digital Currency and on Amendments to Certain Legislative Acts of the Russian Federation" entered into force, which, in particular, introduced the concept of digital currency into civil circulation.
"Digital currency" means a set of electronic data (digital code or digital designation’s) contained in an information system that is offered and (or) can be accepted as a means of payment that is not a monetary unit of the Russian Federation, a monetary unit of a foreign state and (or) an international monetary or settlement unit, and (or) as an investment, and in respect of which there is no person obligated to each owner of such electronic data, except for the operator and (or) nodes of the information system, they are only obliged to ensure that the procedure for the release of these electronic data and the implementation of actions in relation to them to make (change) records in such an information system complies with its rules.
The adoption of the above-mentioned laws was aimed at recognizing cryptocurrency as property and, as a result, introducing taxation on transactions using cryptocurrency.
On December 01, 2020 The Government of the Russian Federation has submitted the Bill No. 1065710-7 to the State Duma of the Russian Federation, which was adopted in the first reading on February 17, 2021.
The Bill contains the following provisions:
·        It is intended to oblige taxpayers to report the receipt of the right to dispose, including through third parties (in this case, most likely, it means the presence of crypto-wallets, for example, on the Totalcoin platform), digital currency and digital currency balances to the tax authority no later than April 30 of the calendar year following the reporting calendar year;
·        The taxpayer is obliged to provide information on transactions using digital currency if the transaction amount for the receipt or debiting of digital currency from the taxpayer's account for the past calendar year is equivalent to 600 thousand rubles or more. The calculation of the amount of each transaction is determined on the day of the transaction;
·        It is expected that the Federal Tax Service of the Russian Federation will additionally approve the format for notifying tax authorities about transactions made using cryptocurrency;
·        (Important!) The tax authorities will have the right to receive bank statements on the accounts of individuals who are not sole proprietors, if there are signs of tax violations related to digital currency transfer operations;
·        Failure by the taxpayer to provide information on transactions using digital currency entails the imposition of a fine of 10% of the largest of the two amounts: the amount of receipt or the amount of debiting digital currency from the taxpayer's account;
·        Failure by the taxpayer to provide information about information using digital currency and about the balances of digital currency-entails the imposition of a fine in the amount of 50,000 rubles;
·        (Important!) Non-payment or incomplete payment by the taxpayer of the amount of tax as a result of the inclusion in the tax base profit (income) from operations, calculations which were carried out using the digital currency, shall entail imposing a fine in the amount of 40 % of the unpaid tax such transactions.
What are the likely consequences of passing the Bill draft and what should taxpayers prepare for?
Most likely, the Bill No. 1065710-7 will be adopted in an amended version. It is important to understand that the taxation of transactions using cryptocurrency is an inevitable stage in the development of the modern economy.
In 2021, the cryptocurrency is no longer an innovation, operations with cryptocurrency became a routine.
Thanks to crypto exchanges and the ability to issue crypto wallets through them (like the aforementioned Totalcoin platform), the cryptocurrency has become available to a wide range of people. In this regard, the possibility of detecting transactions using cryptocurrency is no longer surprising.
The process of acquiring, for example, Bitcoin through the Totalcoin crypto exchange occurs by transferring funds to the seller's bank account and then crediting the digital currency funds to the buyer's crypto wallet opened within the crypto exchange.
Transactions using cryptocurrency are increasingly moving away from cash payments and personal interaction between the seller and the buyer, and are moving to non-cash payments on centralized crypto exchanges. In this regard, payments for the purchase of cryptocurrency can not take place without the supervision of the tax authorities.
Moreover, trusted crypto exchanges verify their users (Binance, Exmo, Kuna), and the Russian tax authorities, within the framework of interdepartmental interaction, have the opportunity to request information about users ' transactions using cryptocurrency.
To the attention of taxpayers!
The adoption of Bill No. 1065710-7 will allow tax authorities to access the data of individuals in case of suspicion of conducting undeclared transactions with cryptocurrency.
Detecting of transactions using cryptocurrency in such cases will only be a matter of time.
In addition, it should be noted that the obligation to pay taxes on transactions using cryptocurrency already exists. The Bill No. 1065710-7 only emphasizes this obligation by proposing to make an indication in the Tax Code of the Russian Federation that the digital currency is a property.
Another important innovation is the establishment of deadlines for the submission of relevant reports and the maximum allowable amounts of transactions using cryptocurrencies that are exempt from taxation.
Thus, persons conducting transactions using cryptocurrencies are recommended to monitor the adoption of the Bill No. 1065710-7, adjust the operations carried out in order to comply with tax legislation, and in case of illegal accrual of tax arrears (fines) on transactions using cryptocurrencies, defend their interests in the courts.

Semyon Titorenko 
Junior Associate
2021 Tax law