What is happening with the regulation of cryptocurrencies in Russia in 2022: the opinion of a lawyer of GMT Legal

In early May 2022, we recorded a video interview with Andrey Tugarin, Managing Partner of GMT Legal, where we discussed two new bills on the regulation of cryptocurrencies in Russia. In this material, we have prepared a brief squeeze with the main theses from the interview.

Video version for those who are more comfortable watching

Full version of the interview with Andrey Tugarin

Draft law on taxation of digital rights

At the time of the recording of the interview, the bill passed the first reading. The main theses of Andrey Tugarin about him:

• It has nothing to do with cryptocurrency because it regulates other entities.
• Digital rights, digital assets, utilitarian rights, digital financial assets (DFA) – the bill is about them. And none of these terms refer to cryptocurrency.
• This bill is for the future, because the listed entities do not yet exist. But when they appear, there will already be a law to regulate them.

Draft law on the taxation of digital currency

At the time of recording the interview, the bill is undergoing a second reading. The main theses of Andrey Tugarin about him:

• Digital currency – this is the term that cryptocurrency refers to. Therefore, the bill is just about cryptocurrency.
• He does not set the obligation to pay taxes on income from transactions with digital currency, he has a different task.
• Its task is to obtain a database of crypt owners in the Russian Federation, to assess the market and turnover. And then screw mechanisms against money laundering and financing of banned organizations to this.
• The bill will oblige to report on the operations of those users whose turnover in the cryptocurrency will exceed 600 thousand rubles They will simply have to declare, that is, report the transactions to the regulatory body (most likely, it will be the Ministry of Finance) and report the balances of cryptocurrency on their crypto wallets.
• Apart from the obligation to report, the bill adds nothing.
• If you do not report on transactions and balances, there will be fines. Much of the bill describes fines and the situations in which they are applied.
• 600 thousand rubles. – it is not yet clear how exactly this turnover will be counted. It will be possible to understand when the law will be adopted.
• The bill is undergoing a second reading, it has not entered into force, so there is no obligation to declare operations in excess of 600 thousand rubles.

And where then are taxes on income from cryptocurrencies regulated:

The bills discussed above do not oblige to pay taxes on income from operations with cryptocurrency. Therefore, Andrey Tugarin clarified how the taxation of operations with cryptocurrency works:

• To pay taxes on income from operations with cryptocurrency, you do not need to wait for any bills, the already existing Tax Code is enough.
• There are already letters from the Ministry of Finance with explanations of how to pay such taxes. And there is a separate income code (09 – Income from transactions with digital currency), which must be indicated in the form 3-NDFL.
• That is, to pay taxes on income from cryptocurrencies and so it is necessary. All the necessary laws already exist for this.

Conclusion

In an interview, Andrei Tugarin analyzed 2 bills:

1. About the taxation of digital rights – has nothing to do with cryptocurrency.
2. In terms of taxation of digital currency – when it comes into force, it will only be obliged to report on transactions with cryptocurrency and balances on wallets if the turnover exceeds 600 thousand rubles.

And taxation is regulated by the Tax Code of the Russian Federation and the letters of the Ministry of Finance. Tax on income from operations with cryptocurrency must be paid. To do this, there is a form 3-NDFL and a separate income code – 09.