Russian lawmakers propose a new bill seeking harsh penalties for unreported crypto holdings.

Russia's Ministry of Finance has proposed a bill seeking harsh penalties for anyone who does not report their cryptocurrency holdings above a certain level.

According to local news reports, the Russian Ministry of Finance has sent out a new draft bill addressing the circulation of cryptocurrency in the country to interested government departments. The bill contains amendments to the Russian Criminal Code, the Criminal Procedure Code, the Administrative Code, the Tax Code, and the law on combating money laundering, the publication conveyed, claiming to be familiar with the bill. The main changes from the previous bill concern citizens’ obligation to declare their crypto operations as well as the content of their cryptocurrency wallets.

 

The bill proposes requiring exchanges and users to report crypto holdings. 

The finance ministry proposes requiring exchanges and users to inform the tax authority about cryptocurrency transactions. Noting that the market views the previous draft law as posing significant restriction to the circulation of digital currencies in Russia, Kommersant reported that the new draft law is even more strict. “In particular, any person who has received cryptocurrency worth more than 100,000 rubles [$1,280] in a calendar year is obliged to inform the tax authority and submit an annual report on transactions with such assets and the balances of these assets. 

 

Non-declaration of crypto could be punishable with prison time and heavy fines. 

Bryan Cave Leighton Paisner (Russia) LLP’s senior tax lawyer Dmitry Kirillov explained that the first report would have to be submitted by April 30, 2021, if the amendments are adopted for the 2020 tax filing year. “For failure to report to the tax authority, you can get a fine of 30% of crypto assets, but not less than 50,000 rubles,” he added. Roman Yankovsky, a commission on legal support of the digital economy, explained that non-declaration of a crypto wallet if more than 1 million rubles [$12,796] has passed through it per year, becomes a criminal offense of up to three years in prison.  

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Jai Pratap
Jai Pratap
A Mass Media Graduate who loves to write. Jai is also a sports enthusiast and a big movie buff. He loves to learn new things.

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