Lawmakers in Russia’s Duma are drawing up legislation that could pave the way for the taxation of digital currencies, according to reports.
As per an official announcement from Russia’s state parliament, the Committee on State Building and Legislation has given the green light to the bill, which will introduce a raft of amendments to the country’s tax code. State news agency RIA Novosti reported that the State Duma has already approved the draft legislation in the first reading on Wednesday.
Under the legislation, there will now be a legal definition treating digital currencies as a form of property. As a result, tax liability will crystalize for Russian residents on the sale of digital currency where there is a capital gain.
Domestic residents from Russia and elsewhere, as well as domestic and foreign organizations established in the country, will be covered by the act. All entities will be required under the new law to report digital currency transactions where the volume incoming and outgoing exceeds 600,000 rubles per year—equivalent to approximately $8,100 annually.
The act will also introduce penalties for breaches of the law, including late and false reporting, with fines ranging up to 10% of the total annual incoming and outgoing transactions. Fines for non-payment could range up as high as 40% of the amounts unpaid.
The draft bill is the latest phase of Russia’s drive to develop a system of regulation for digital currency. It follows on from a bill, “On Digital Financial Assets,” which came into force in January 2021, effectively preventing citizens from making payments in digital currency.
Despite the attempts to introduce regulation, a number of areas remain undefined in Russian law, including rules around mining and taxation.
While the certainty from the new draft legislation will be welcomed by the digital currency sector in Russia, there are calls for measures that go further in defining the legal landscape for digital currency transactions.
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