The Federal Tax Service. Source: Adobe / Alexandr Blinov
Russian crypto owners have been warned they only have a month before the tax officer calls – with miners, custodians and traders all having to declare their winnings.
While the country is likely to be “a year or more” away from comprehensive crypto laws, tax laws were changed in time for this year’s tax season – meaning anyone in Russia who makes money from crypto in 2019 is legally required to report their earnings .
According to RBC, Russians were originally required to file tax return documents – including details of their crypto earnings – by early next month, although a new deadline of July 30 has been set due to the disruption caused by the coronavirus pandemic. Individuals are taxed at a flat rate of 13%.
However, for many who are still in the dark, there is still confusion about what exactly to declare – and how to calculate the value in rubles of transactions made in crypto a few months ago.
A crypto trader in Moscow who asked to remain nameless told Cryptonews.com:
“I’ve read the new tax code crypto regulations and all I can say is that they are difficult to follow and have turned my head.”
RBC cited a tax attorney as saying that companies or individuals involved in mining, trading, or crypto-related activities must all disclose their earnings or risk penalties.
Meanwhile, Mikhail Uspensky was quoted by the Moscow branch of the Russian Bar Association as saying that crypto holdings themselves are not taxable. Trades in which cryptoassets are converted into fiat are taxable.
Lawyers also believed that some Bitcoin (BTC) and altcoin purchases could also be taxed.
There can be no way out of fiddly calculations, however, as Uspensky added that in order to calculate how much tax to pay for a profitable fiat-crypto-fiat trade, a trader would have to subtract their token purchase price from the price of the asset Time of sale.
Corporations, meanwhile, have an additional headache as they have different tax rates depending on the type of legal entity, with tax rates varying between 6% and 15%.
A lawyer warned that explanations are just the beginning and that crypto-related grills are likely to follow, adding:
“The tax authorities will ask a lot of questions to find out what operations using cryptocurrency were profitable, what the costs were, and how they all relate to each other.”
“Interesting” two-bill plan can save “Shambolic” Russian crypto law
Changes to the South Korean bitcoin tax will be unveiled in July
66,000 Spanish crypto traders have been warned to pay taxes on their income