Russia reviews bill that could see crypto legalized in the country

  •  Russian Cabinet of Ministers introduced in the State Duma a bill on taxes on transactions with digital assets.
  • The cryptocurrency community has celebrated this news.

Some provisions of the draft law were clarified and specified, including those related to the activities of digital mining, according to the message on the website of the Ministry.

The document provides for the creation of comprehensive regulation of the cryptocurrency market, including the order of transactions with digital currencies and their issue, as well as determining the specifics of the activities of the subjects of the cryptocurrency market.

The document clarifies the features of VAT for operations on the sale of digital assets, corporate income tax, as well as personal income tax on profits and income of taxpayers from the sale of digital assets.

Under the bill, VAT will be subject to the services of information systems operators, which issue digital financial assets (DFA), as well as exchange operators of digital financial assets for the admission of digital rights.

The financial result of transactions with CFA is determined on the date of income payment separately for each transaction and for their totality.

The tax base for transactions with securities not traded on the organized securities market may be reduced by the amount of loss on transactions with CFA.

Upon realization of digital rights which include both security and utility tokens, the tax base shall be determined as the difference between the price of realization and acquisition of the said digital right with the tax amount taken into account.

The tax on income of Russian organizations owning digital rights will be 13 percent, for foreign companies – 15 percent.

CFA issuer has until February 1, 2023, to submit a report to the tax authorities on transactions made during the year 2022 with CFA and individuals who were parties to the transaction.

Recall, that amendments to the tax code concerning the taxation of transactions with cryptoassets may be adopted in parallel with the draft law “On digital currency”. The latter provides for transactions with cryptocurrencies through Russian banks, identification of holders of cryptocurrency wallets and separation of investors by qualification.

Reaction of crypto-community

This news was warmly received by the cryptocurrency community. Binance CEO Changpeng “CZ” Zhao wrote a post on Twitter, “Russia will legalize crypto for payments. Surprise surprise.”

But then he had to delete the post because the information turned out to be unconfirmed. A local Russian online newspaper “Коммерсантъ” published an article with information about the allegedly final version of the document. The document enshrines the digital currency-related terminology, the regulatory framework for its circulation and issuance, and a number of other aspects. It introduces a large number of requirements for identification, accounting and certification, but, as noted by the interviewed experts, these requirements will not affect transactions with cryptocurrency outside of the Russian information infrastructure.

By the way, in case of full legalization of digital assets, Russia will be able to use cryptocurrencies, such as bitcoin, to receive payment for gas and oil exports under sanctions.

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