The Russian State Duma has approved a draft bill cryptocurrency taxation on February 15th, 2021 that would be up for consideration on February 17th, 2021. The new draft bill proposes certain amendments to the Russian federal tax code to levy a tax against crypto transactions after prohibiting its use as a currency back in January 2021.
The explanatory note to the bill read,
For the purposes of the Tax Code of the Russian Federation, it is proposed to recognize digital currency as property,
The draft bill proposes to consider bitcoin and other cryptocurrencies as property where every citizen holding more than 600 thousand rubles in a calendar year would need to report to the authorities. Back in January, the State Duma passed the first official legislation around cryptocurrencies where it prohibited the citizens from using cryptocurrencies as a form of exchange.
New Draft Bill Proposes Taxation and Penalties
Russian regulatory bodies have been proposing taxation on cryptocurrencies for nearly 2 years where they wanted to either be considered as a form of property or a treasure find. The new draft bill brings in those changes where it also proposed various penalties and fines for individuals who fail to declare their crypto holdings on time.
The official document also talks suggests tax liability for unlawful and untimely failure to submit or submission of a report on transactions (civil transactions) with digital currency and on the balances of the specified digital currency containing inaccurate information.
The misinformation or untimely filings would attract fines of up to 10% from incoming or outgoing transactions. In case, an individual fails to file tax returns on their cryptocurrency they would incur up to 40% of the total value of the liable tax as a fine. The new draft bill would provide a better structure to the official crypto legislation which even though recognized cryptocurrencies, did not offer much in terms of details on taxation.