• The Federal Tax Service in Russia says citizens “can pay” taxes on their crypto earnings, despite the fact that tokens have no legal status in the country.
• Citizens can declare their earnings on crypto personal income tax declarations or use the simplified taxation system (STS).
• Crypto can be recognized as a form of property – and declared on tax returns accordingly.
Crypto Earnings Can Be Taxed in Russia
The Russian tax body, Federal Tax Service (FTS) has stated that citizens “can pay” taxes on their crypto earnings, despite the fact that tokens have no legal status in the country. This is another sign that the government appears to be sending mixed messages about its stance on crypto.
The FTS said those making profits from crypto could declare their earnings on crypto personal income tax declarations or use the simplified taxation system (STS). The FTS noted that “income from the sale of cryptocurrency” can be calculated by using “the documented costs of its purchase.” It insisted that tax calculations must be made in fiat rubles. The body advised crypto traders to “submit a declaration” using existing documents by April 30, 2024. Alternatively, using the STS, crypto traders can reportedly calculate their earnings by calculating the difference between their incomes for sales and the price at which they purchased it.
Legal Status of Crypto
Crypto has no legal status in Russia yet and The Central Bank favors a China-style ban on all forms of crypto-related activity. Government ministries such as finance, trade and energy are trying to find a way to legalize and regulate this asset class due to US sanctions regime imposed on Russia leading some firms to buy and sell goods for crypto .
Crypto as Property
Russian courts have previously ruled that crypto can be protected as a form of “intangible property,” and thus covered by existing property rights. The FTS conceded that “the status of cryptocurrencies is not fixed by law,” but said that “until this issue is resolved,” sale of cryptocurrencies could be considered as sale of property.
Deadline For Declaration
The FTS stated taxpayers must submit declaration before April 30th 2024 using existing documents for calculation for income from sale of cryptocurrency with documented costs from its purchase which should all be done in Rubles only.