In what could only be seen as somewhat paradoxical, Russia’s own Federal Tax Service (FTS) has affirmed that citizens “can pay” taxes on crypto earnings, regardless of the fact that cryptocurrency doesn’t have a legal status in the country. For those dabbling in the crypto market, this dualism is perplexing, being indicative of the government’s seemingly inconsistent position towards digital financial technology.
According to a recent V2B report, FTS has specified two methodologies that crypto enthusiasts could make use of to pay their owing taxes – personal income tax disclosures or using the condensed taxation system (STS). Such announcements, interestingly, come at a time when Russia and its Central Bank lean towards a more prohibitive stance on crypto activities, one akin to that of China’s.
This juxtaposition of governing authorities—an unequivocal orientation towards crypto regulation from governmental ministries such as finance, trade, and energy, weighed against the Central Bank’s anti-crypto stance—has fostered an enduring deadlock. This inconsistency is further complicated by the sanctions imposed on Russia by the United States and its allies. As a response to being pushed into a corner, some resourceful Russian firms are initiating trade via cryptocurrencies in an attempt to break away from dollar dominance.
Their predicament became more intricate when the finance ministry proposed last week to bar all but miners from dealing with cryptocurrencies—an idea that was rapidly overshadowed by FTS’s announcement. The tax body stated that cryptocurrencies can be presumed to be a form of property legitimately declared on tax returns. This isn’t exactly groundbreaking news. Russian courts have in the past ruled that cryptocurrencies can be safeguarded as “intangible property”, thereby covered by existing property rights.
Getting into the technicalities, FTS has specified that income from selling of cryptocurrency can be calculated based on “the documented costs of its purchase. However, the tax calculations must be undertaken in fiat rubles. Furthermore, the tax institution advises crypto traders to “submit a declaration”, for which they may use current documents by April 30, 2024, or hit the STS road to determine their earnings. A contrasting landscape of regulation and prohibition, the situation in Russia reads like an intriguing chapter in the global cryptoverse narrative.
Source: Cryptonews
