According to local reports, lawmakers in Russia’s Duma are drawing up legislation that could pave the way for the taxation of digital currencies. As per an official announcement from Russia’s state parliament, the Committee on State Building and Legislation has given the green light to the bill, introducing a raft of amendments to the country’s tax code. State news agency RIA Novosti reported that the State Duma has already approved the draft legislation in the first reading on Wednesday.
The legislation would treat digital currencies as a form of property.
There will now be a legal definition under the legislation treating digital currencies as a form of property. As a result, the tax liability will crystalize for Russian residents on cryptocurrency sales where there is a capital gain. Domestic residents from Russia and elsewhere, including domestic and foreign organizations established in the country, will be covered by this legislation. All entities will be required under the new law to report digital currency transactions where the volume incoming and outgoing exceeds 600,000 rubles per year—equivalent to approximately $8,100 annually.
The act will also introduce penalties for breaches of the law.
The upcoming act will also introduce penalties for breaches of the law, including late and false reporting, with fines ranging up to 10% of the total annual incoming and outgoing transactions. Fines for non-payment could range up as high as 40% of the amounts unpaid. The draft bill is the latest phase of Russia’s drive to develop a system of regulation for digital currency. The act follows on from a bill, “On Digital Financial Assets,” which came into force in January 2021, effectively preventing citizens from making payments in digital currency.