Tax on cryptocurrency in Russia in 2021: what to consider

Questions about paying taxes on cryptocurrency in Russia in 2021 are becoming urgent for Russian businesspeople. According to the new changes in the laws, it is necessary to pay tax, but it is forbidden to pay with digital assets. If the norms of the laws are not complied with, the person will need to pay a fine and, in some cases, will be imprisoned.

Changes in the laws in 2021

Previously, virtual currency in Russia was practically unregulated, which gave the possibility to use bitcoin in any amount. The issue of regulation of cryptocurrency in Russia in 2021 was repeatedly discussed, and the work on the law was conducted for a long period. Since the beginning of 2021, a project to bring the currency out of the shadows has come into force.

The essence of the Federal Law on digital financial assets (DFA) is the introduction of legalization of virtual currency, which is not recognized as means of payment. Revenues will be taxed on the basis of property ownership.

According to the law, digital currency is different from DFA and has the concept of property, which can be bought, donated, exchanged, and so on. Transactions can only be carried out with the involvement of exchange operators.

The innovation provides for a change in the terms of taxation of cryptocurrency. If the amount of transactions is more than 600,000 per year, it is required to declare the profits to the tax authorities. If the necessary information was not provided to the fiscal authorities, there is a risk of criminal liability.

Failure to pay taxes provides for penalties, which may amount to 40% and 20% of the underpayment figure. The legalization of cryptocurrency income will protect property rights. DFA can be inherited, they can be accumulated.

Nuances of taxation and liability

The sale of virtual currency will require the payment of personal income tax which is 13%. From the beginning of 2021, the rate will increase to 15% if the amount of income is over 5,000,000. The calculation of the amount of tax is set independently, the relevant information must be entered into the declaration.

There are penalties for non-payment of taxes in case of violation of laws. If it is proved that the late payment was unintentional, the penalty will be 20 percent of the underpayment; if it was carried out on purpose - 40 percent.

In some cases, there is a risk of criminal liability. If the arrears are large and amount to 2.7 million over 3 years, a fine of up to 300 thousand rubles may be required and there is a risk of imprisonment up to a year. If the tax arrears are large and amount to 13.5 million, the penalty can be up to 500,000 rubles.

Nuances of reporting

According to the law, there is an opportunity to submit reports in any form via the payer's personal computer, and you can send a registered or electronic letter, or come to the tax authority in person. Tax authorities may request statements of funds transfers if they are related to digital currency.

The same rules apply to cryptocurrency as to the taxation of personal income. The rate is 13-15%, depending on the amount of income. A general law on digital currencies is expected to be implemented in the near future.