In Russia, it may be required to declare transactions with digital currencies

The Russian Ministry of Finance proposed to oblige individuals and legal entities to declare transactions with digital currencies exceeding 600,000 rubles per year. Amendments to the Criminal Code, the Code of Administrative Offences and the Tax Code have already been prepared.
The proposed amendments oblige any organizations operating in Russia, as well as individuals and individual entrepreneurs, to declare receipts and write-offs of digital currencies and crypto-asset assets, the amount of which exceeds 600 000 rubles per year. There is no need to declare transfers between their own purses. The transaction amount is calculated at the asset exchange rate as of the date of transaction.

At the same time it is also possible and even recommended to declare transactions for a smaller amount – according to representatives of the Ministry of Finance of the Russian Federation, this will allow “to get judicial protection”. The declaration should be submitted before April 30 of the next year.

What is the responsibility for violating the declaration of digital currencies?

The Ministry of Finance also proposed penalties for failure to submit the relevant information. The Tax Code may contain articles implying a fine of 10% of the largest of the two amounts (additions or write-offs). A fine of 50,000 rubles is proposed for violation of the reporting deadline. If profit from such transactions was not declared in the declaration, the penalty will be 40% of the unpaid tax.

In case of systematic evasion from declaring operations with digital currencies on a large scale it is proposed to introduce criminal liability. Article 199.5 of the Criminal Code of the Russian Federation titled “Evasion of obligation to submit a report on transactions (civil law transactions) with digital currency and on the balances of this digital currency” proposes to introduce a fine from 100,000 to 300,000 rubles or in the amount of wages or other income from one to two years, or forced labor for up to two years, or arrest for up to six months.

For violations on a particularly large scale or by a group of persons by prior conspiracy, or with the use of a legal entity specially created for crimes, it is proposed to introduce a fine of 500,000 to 2 million rubles, or in the amount of wages or other income from 18 months to three years, or forced labor for up to five years, or imprisonment for up to three years.

It should be noted that operations with digital currencies, the total volume of which exceeds the equivalent of 15 million rubles for three years, are considered to be large, while operations with especially large currencies are considered to be 45 million rubles.

What about the CAO?

As for the CAO, the RF Ministry of Finance proposes to introduce an article for organization of illegal turnover of digital financial assets and violation of the rules of transactions with them. In addition, fines are also envisaged for accepting digital currency as payment by persons who are not entitled to such transactions.

For example, for organization of issue of digital assets and transactions with them it is proposed to introduce a fine for citizens from 50 000 to 500 000 rubles; for officials – from 100 000 to 1 million rubles or disqualification from 6 months to one year; for legal entities – from 200 000 to 2 million rubles. For accepting digital assets as payment for goods and services without proper registration, the penalty for citizens will be from 20 000 to 200 000 rubles with confiscation of assets; for officials – from 50 000 to 400 000 rubles with confiscation, for legal entities – from 100 000 to 1 million rubles with confiscation.

Recall that back in May the State Duma Committee on Financial Markets sent out a bill and amendments to the codes, providing for the introduction of fines of up to 2 million rubles or imprisonment for up to 7 years for the issuance and circulation of public crypto assets.