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Russian Government Has Decided to Levy Tax on Digital Assets

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The regulation of transactions involving digital assets has been amended by Russian legislators. The legislation relates to cryptocurrency and token-related corporate operations. In some scenarios, Russian enterprises will have less burden than international ones.

Tax levied on digital assets

The State Duma, the lower house of the Russian parliament, has passed a measure revising the Taxation System of the Russian Federation to permit the authorities in Moscow to tax activities with digital financial assets (DFAs).

As DFA is now the primary word in Russian law that refers to digital currencies, the legislation resolves a number of taxation-related issues. This autumn, new legislation “On Digital Currency” might broaden the terminology and regulatory process for cryptocurrency exchanges. The paper, which was cited by the cryptocurrency news site Forklog, states that, comparable to assets, services offered by organizations that issue, manage, and keep track of the circulation of DFAs would be excused from the value-added tax (VAT).

Russian government on taxation of digital asset, Credit: Money Under 30
Russian government on taxation of digital asset, Credit: Money Under 30

Russian taxation regulations

The tax structure will be calculated regarding the difference between the purchase and sales price of the relevant virtual property while executing digital rights, the legal concept for security, and utility tokens. According to the current tax regulations, Russian legal organizations that possess digital tokens must pay 13 percent of the income they earn from them, while foreign-based enterprises must pay a much higher 15 percent rate, somewhat favoring local companies.

Initially presented to the State Duma in mid-April, the cryptocurrency tax bill was approved on the first reading the entire month. The government financial industry and proposed legislation groups also gave their approval. Legal authorities were reported at the time as suggesting that private crypto assets are immune from the tax laws. This year, Russian authorities have been striving to completely control the cryptocurrency market in their nation. The Ministry of Finance introduced the virtual currencies law in February, but it hasn’t been passed because of contemporary discussions over the eventual legal standing of decentralized digital currencies like Bitcoin.

Ujan Chakraborty
Ujan Chakraborty
Nothing but Blue Skies.

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