Russia’s Ministry of Finance plays an important role when it comes to the cryptocurrency industry. For example, in early September, the ministry proposed a blanket ban on any crypto transactions except for obtaining cryptocurrency through three methods. The first one is inheritance, the second one is bankruptcy, and the last one is the enforcement proceedings.
This is not the end of the story, as the Ministry of Finance went even further according to a report. The Ministry of Finance now reportedly wants to introduce criminal liability for failure to declare taxes on crypto, including prison terms of up to three years.
It is worth mentioning that, the country’s Ministry of Finance wants to punish individuals who fail to report an amount of over 1 million Russian rubles ($13,000) in annual crypto operations, should serve a three-year prison term. Another form of punishment is hard labor.
Cryptocurrency industry and legal aspects
Importantly, the Ministry of Finance also proposed fines for smaller unreported amounts. It means any physical or legal entity in the country would have to report their annual crypto income if its amount is bigger than 100,000 rubles ($1,300).
However, if an individual or a legal entity fails to declare this information, the ministry wants to impose a fine. They will have to pay 30% of the total amount of crypto assets held, but no less than 50,000 rubles.
People should take into account that, the ministry also proposed another novelty. They want to require local cryptocurrency exchange services to report on taxes every quarter.
As a reminder, the current version of the law “On Digital Assets” does not provide taxation rates for crypto. Moreover, the law does not mention general rules to report those transactions. Russian President Vladimir Putin signed this bill into law this year. Russian authorities should provide more clarity regarding the cryptocurrency regulations.