Russia offered to go to Jail for Undeclared Bitcoins

Kataryna Habeliia November 12, 2020

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Russia offered to go to Jail for Undeclared Bitcoins

Owners of digital currencies face up to three years in prison if they do not report to the tax authorities on transactions in the equivalent of 45 million rubles or more. Such a norm is contained in the new version of the amendments of the RF Ministry of Finance to the Criminal and Criminal Procedure Codes.

Individuals and organizations must report to the FTS (Federal Tax Service) on the receipt of digital currency, transactions with it, and balances in the crypto wallet if the amount of transactions in a calendar year exceeds the equivalent of 600,000 rubles(~$ 7700).

The calculation is made at the market price of the digital currency on the date of each transaction. The procedure for determining the market price must be established by the Federal Tax Service.

For the first time, the ownership of crypto assets must be reported no later than April 30, 2022. Crypto exchanges and miners must send information about transactions with digital currencies to Rosfinmonitoring.

Fines for undeclared Bitcoins

For violation of the reporting deadline, a fine of 50,000 rubles (~$ 650) is provided. For illegal information — a fine of 10% of the largest of the two amounts in ruble equivalent (the amount of receipt or the amount of digital currency withdrawal).

Failure to pay or incomplete payment of tax on income from digital currency transactions entails a penalty of 40% of the amount of unpaid tax.

To comply with the general principles of legal regulation, digital currency is recognized as property.

If the owners of crypto assets for three years more than two times did not provide data to the tax authority or included deliberately false information in the report, then this entails criminal liability:

  • For undeclared transactions with a digital currency of 15 million rubles (~$ 200000) over three years, the fine will be up to 300,000 rubles (~$ 4000).
  • If in three years transactions are made in the amount of 45 million rubles (~$ 585 000) or more, asset owners face a fine of up to 2 million rubles (~$ 25000) or imprisonment for up to three years.

Administrative fines for organizing illegal circulation of digital assets and violation of the rules for making transactions with crypto assets:

  • for citizens will be up to 500,000 rubles (~$ 6500);
  • for officials — up to 1 million rubles (~$ 13000) or disqualification for a period from six months to one year;
  • for legal entities — up to 2 million rubles (~$ 26000).

If the digital currency was used as a means of payment for goods or services, then a fine of up to 200,000 rubles (~$ 2500) is imposed on citizens, 400,000 rubles (~$ 5000) on officials, and up to 1 million rubles for legal entities. In all these cases, digital currency is withdrawn.

Other changes in cryptocurrency regulation in Russia

The Ministry of Finance also developed amendments to the Tax Code, anti-money laundering legislation, and the Code of Administrative Offenses in terms of regulation of digital currencies and digital financial assets (DFA).

Papers submitted for public comment.

Let us remind you that the RF Ministry of Finance presented the first amendments to the law “On CFA” in early September. They prohibit the circulation and release of cryptocurrency, except its inheritance and collection within the framework of bankruptcy and enforcement proceedings. It is not allowed to receive digital currency as a mining reward.

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