Crypto profit of Russians became interested in the Tax: “Trillions are stored”

Why did the authorities suddenly have an interest in income from digital assets of citizens

The Federal Tax Service (FTS) has begun sending letters to owners of cryptocurrencies. This is evidenced by the information in the BitOK crypto assets control, accounting and analytics service. Letters are sent to individuals who filed 3-NDFL declarations for the previous two years, while the documents are asked to be presented urgently. And Rosfinmonitoring, together with Russian banks, helps to identify tax evaders. Why did the Federal Tax Service have an interest in this topic and whether it has the right to demand something from citizens when part of the legislation on cryptocurrencies is still being developed, experts told MK.

The problem of citizens paying taxes on the turnover of cryptocurrencies has long been a concern for official authorities not only in Russia. According to Divly research, at the end of 2022, only 0.53% of investors on the planet paid taxes on transactions with digital assets, including those countries where it is generally mandatory. The citizens of Finland turned out to be the most disciplined, where more than 4% of owners of digital assets filed their tax returns, followed by Australians (3.65%) and residents of Austria (2.75%). And the leading country in terms of mining volume in 2022, the United States, in terms of citizens paying taxes on cryptocurrencies, was only in the top ten. At the same time, The Wall Street Journal has already reported on US President Joe Biden’s plans to collect $24 billion in taxes from crypto investors in fiscal year 2024, for which changes in legislation will be made.

It is curious that there are no data on Russians in the study at all. The Federal Tax Service does not share such information, so experts only talk about rough estimates. “I personally know that more than 3,000 declarations were filed in 2022,” says Andrey Tugarin, Managing Partner at GMT Legal. “However, the government of the Russian Federation itself in May 2022 calculated that the amount of funds in the wallets of Russians is about 10 trillion rubles.”

Experts disagreed about what caused the sudden interest of the tax authorities in the holders of crypto assets in Russia. Tugarin claims that the number of declarations filed just forced the Federal Tax Service to pay attention to this segment of taxpayers. The department could not ignore such a volume. At the same time, Oleg Ogienko, BitRiver’s director for government relations, believes that this is a formal procedure and the request of the Federal Tax Service to confirm income and expenses does not have a direct suspicion of receiving shadow funds. However, according to Dmitry Machikhin, the founder of the BitOK service, the purpose of all checks is precisely to identify “evaders”. Rosfinmonitoring, together with Russian banks, helps the Federal Tax Service to detect facts of operations related to cryptocurrency. “Those users who have not filed 3-personal income tax, they pull,” the expert explained. “As for the already submitted declarations, it is most likely that the documents were filled out with violations, for example, documents confirming the expense were not provided, or the sites themselves where the transactions were made are dubious.” The holder of crypto assets should prepare for more transparent work with banks and the Federal Tax Service in Russia. “Even if you have no profit, you will most likely have to answer questions about 3-personal income tax, about the origin of funds, as this becomes an obvious requirement,” Machikhin warns.

At the same time, all the interviewed lawyers argue that if in terms of some individual definitions, cryptocurrency transactions have not fully acquired legislation, then the rules regarding the payment of taxes have long been spelled out. According to Yulia Chentsova, business consultant at JTLconsulting, cryptocurrency is legalized in Russia, since the law on digital financial assets and digital currency 259-FZ comes into force on January 1, 2021. In accordance with it, although payments in cryptocurrency are prohibited, cryptocurrency is property, which means that you can receive income from it that will be taxed. Avoiding obligations is not recommended. “If, when filling out the declaration, the amount of tax payable is underestimated or there are no documents confirming the expenses, then a fine of 20% of the unpaid tax amount or 40% may be imposed on an individual if the intent of the committed act is proved,” the expert emphasized. For delay in payment, penalties are charged in the amount of 1/300 of the Central Bank refinancing rate for each overdue day. The lawyer advised the participants of crypto exchanges to be more attentive to the documentation of debit transactions and to think about the consequences and liability before hiding income, since, according to her, control and legal regulation will only increase.