Russian State Duma to Review Tax Amendments for Cryptocurrencies and Digital Financial Assets

A draft law on the taxation of digital financial assets (DFAs) and cryptocurrencies will be submitted to the State Duma in early May. This was announced by Alexey Yakovlev, director of the financial policy department at the Ministry of Finance, during the "Alpha Summit," as reported by RBC.

The amendments pertain to the Tax Code. On April 27, they were approved by the government commission on legislative activity. These amendments accompany the main draft law titled "On Digital Currency and Digital Rights."

What Will Change

The amendments cover four areas: VAT, personal income tax (PIT) for individuals, a special tax regime for exchange-traded digital financial assets, and corporate profit tax.

Individuals' income from cryptocurrency transactions will be taxed under PIT, similar to securities. Revenues and expenses from transactions involving digital currency and digital rights will be allowed to be netted within the tax period.

Brokers and trust managers conducting payments for such transactions will act as tax agents. For debt DFAs on the exchange market, provisions will allow for the carryover of losses to future periods.

For companies, income and expenses from crypto operations (excluding mining) will be included in the overall tax base for profit tax. Periodic payments on debt digital financial assets will be equated to interest income from loans.

VAT will not be charged on services provided by digital depositories and exchanges, nor on the sale of undocumented foreign virtual rights that solely certify monetary claims.

A separate tax base and a preferential rate will be introduced for ruble-denominated debt DFAs issued by Russian entities. When repurchasing such assets over-the-counter, companies will be able to account for income and expenses if the transaction price is close to the exchange price.

It is worth noting that in early April, the Central Bank of Russia allowed for criminal liability for unlicensed crypto exchanges. ForkLog spoke with experts about who would be affected by these measures if adopted.