Russians Now Able to Pay Taxes on Crypto Earnings

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Despite the fact that crypto has no legal status in Russia, the Federal Tax Service (FTS) has stated that citizens can pay taxes on their crypto earnings. In a sign that the government appears to be sending mixed messages, the FTS declared that income from crypto can be declared on personal income tax declarations or the simplified taxation system (STS).

The Central Bank of Russia favors a China-style ban on all forms of crypto-related activity, while ministries such as finance, trade, and energy want to “legalize” and regulate crypto, creating a years-long impasse between the bodies. To de-dollarize and facilitate trade, some Russian firms are buying and selling goods for crypto.

To provide clarity on the issue, the FTS has stated that crypto can be recognized as a form of property and declared on tax returns. It has also been ruled in Russian courts that crypto can be protected as an intangible property, and thus, covered by existing property rights.

The FTS has advised that the income from crypto can be calculated by using the documented costs of its purchase, and tax calculations must be made in fiat rubles. Taxpayers must submit a declaration before April 30, 2024, or use the STS to calculate their earnings by determining the difference between their sales income and the purchase price of the cryptocurrency.

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