When do you need to pay tax, and when not, do you need to declare your cryptocurrency and in whom it is worth registering as an individual entrepreneur?
There are no special rules for declaring and taxing cryptocurrencies in Russia. Now the State Duma is considering a bill that will oblige the owners of digital assets to inform the tax authorities about the receipt of cryptocurrency, transactions with it and account balances if the amount of incoming or outgoing payments exceeds the equivalent of 600 thousand rubles per year. However, by the time of adoption, the document may have changed significantly.
Is the holder obligated to pay tax on their cryptocurrency?
If the cryptocurrency just lies on the account (wallet), there is no obligation to pay tax on it, explained Dmitry Kirillov, a teacher at Moscow Digital School. If the owner of the cryptocurrency sells it and receives income, tax will have to be paid on such income.
Do I need to disclose my cryptocurrency in the declaration?
The declaration of cryptocurrency for most citizens is not provided for by law, just as people do not declare, for example, their apartments, cars or jewelry, the specialist emphasized. He added that the obligation to declare such property is now assigned only to state officials.
How to pay cryptocurrency tax correctly?
There is still no specific tax regulation for cryptocurrency transactions. For individuals, the law proposes to calculate the tax base as the difference between the income from the sale of digital assets and the documented expenses for their purchase. This approach is enshrined in the explanations of the Ministry of Finance, Kirillov explained.
The declaration of income is also carried out in a general manner – individuals must submit a tax return in the form of 3-NDFL for the previous year by April 30 and pay tax by July 15.
Also, the Ministry of Finance of Russia comments on the procedure for taxing income from transactions with CFA for taxpayers who apply a simplified taxation system. It is proposed to take the date of receipt of funds from the sale of an asset to the taxpayer's bank account or receipt of other property or repayment of debt in another way as the date of receipt of income and recalculation of the value of the CFA, Kirillov added.
Both individuals and organizations / individual entrepreneurs should pay special attention to documenting transactions with cryptocurrency. In the absence of documentary evidence of the purchase of cryptocurrency (for example, from hands for cash), after deducting the purchase costs, the tax authorities will most likely refuse, the specialist warned.
Also, difficulties may arise for organizations and individual entrepreneurs who apply a simplified taxation system and calculate tax on income minus expenses at a rate of 15%. The list of costs in this case is limited and the costs of buying a cryptocurrency can be challenged by the tax authorities, said the Moscow Digital School teacher.
In the letter mentioned above, the Ministry of Finance expressed the opinion that the special tax regime "Tax on professional income" provided for self-employed persons does not apply to cryptocurrency exchange activities. For this reason, citizens who are going to systematically trade cryptocurrency should, before starting such activities, decide the issue of registering as an individual entrepreneur in order to avoid claims of illegal entrepreneurship, the specialist recommended.
Individual entrepreneurs have different taxation systems, added Efim Kazantsev, a member of the Commission on Legal Support of the Digital Economy of the Moscow branch of the Russian Lawyers Association. For those who are engaged in operations with cryptocurrency, the simplified taxation systems "Income 6%" or "Income minus expenses 15%" are usually suitable.
In the first case, 6% of the total income (all receipts to the current account) is paid with a total income of up to 150 million rubles per year, or 8% with a total amount of income from 150 to 200 million rubles per year. In the second – 15% of the difference between income and expenses (expenses must be documented) with a total income of up to 150 million rubles per year, or 20% with a total amount of income from 150 to 200 million rubles per year, the specialist concluded.