Russia welcomes first filed cryptocurrency tax declaration

By | June 14, 2018

Russia welcomes first filed cryptocurrency tax declaration

First Russian resident reports income received from the purchase and sale of cryptocurrency in 2017.

An unnamed resident of the Russian region Altai Republic declared income from operations with cryptocurrency. It is the first time a Russian resident files a tax declaration related to cryptocurrency trading operations, the Federal Tax Service for the Republic of Altai reports. The tax base taken is the difference in rubles between the costs of purchasing cryptocurrency and the proceeds from its sale.

According to Article 228 of the Tax Code of the Russian Federation, taxpayers who receive income independently declare their tax obligations by themselves. In May, the Russian Ministry of Finance published a letter explaining how retail investors should file their income from operations with cryptocurrencies.

The Ministry of Finance recommends to use the rule of subparagraph 2 of paragraph 2 of Article 220 of the Tax Code. According to it, a taxpayer has the right to reduce the amount of his tax base by the amount of actually incurred and documented expenses related to the acquisition of the corresponding property.

The letter of the Ministry of Finance was sent to the territorial tax inspectorates.

At the same time, Elina Sidorenko, head of the interdepartmental group on risk assessment of cryptocurrency turnover, suggested that tax authorities will exempt cryptocurrency owners from the tax burden until 2019, as Russia still lacks of cryptocurrency legislation.

“There is no normatively defined status of cryptocurrency, and therefore it is unclear how it should be taxed. There is no algorithm for income accounting, since it is legally difficult to determine the price of such assets. There are no objective and technical prerequisites for paying taxes from cryptocurrency transactions in a fiat currency,” Sidorenko wrote in her telegram channel.

Published at Thu, 14 Jun 2018 04:27:15 -0400