Russia’s Ministry of Finance has proposed new amendments to the country’s coming law on crypto assets that could soften the requirements for cryptocurrency taxpayers, news agency RBK reported Thursday.
According a package of draft bills, individuals must report their holdings if annual transactions exceed 600,000 Russian rubles (about $7,800). In a previous proposal, the ministry had sought disclosure when transactions pass 100,000 rubles (around $1,300) in one year.
With the law planned to be passed by January, the ministry wants holdings for the next tax year to be disclosed no later than April 30, 2022. The value of the crypto reported will be calculated by the national tax agency based on the prices at the moment of transactions, the bill reads.
Failure to declare the full amount of cryptocurrency owned in a timely manner, as well as not paying taxes on it, will lead to fines. If a taxpayer doesn’t declare his crypto for three years in a row, the punishment will be tougher: up to six months in jail for undeclared crypto worth 15 million rubles (~$195,000) and up to three years in prison for 45 million rubles (~$586,000) and more.
Cryptocurrency miners and over-the-counter (OTC) brokers will have to report deals to Rosfinmonitoring, the agency assigned with preventing money laundering and terrorism financing. The agency earlier reportedly planned to develop its own blockchain-tracing tool to connect crypto addresses with users’ identities.
A previous proposed bill by the regulator sought to ban miners located in Russia and using Russia-based infrastructure from being rewarded for their work in cryptocurrency. That wording prompted fears that mining might be outlawed in Russia altogether, and hasn’t been clarified since.
These amendments, however, are not as harsh as one of the first draft bills, which sought punishment for facilitating crypto transactions in Russia of up to seven years in prison. That version provoked an outcry among the Russian crypto community and even criticism from other ministries.
Mikhail Tretyak, IT expert at the Digital Rights Center, told CoinDesk he believes the new amendment draft, while less harsh than the previous versions, might still scare away crypto entrepreneurs. “Part of the market will go to the darknet,” he said. “Others might choose emigration to the countries with softer regulatory regimes, and people are asking us for help with this more and more each day.”
The Ministry of Finance has also previously suggested limitations on purchasing crypto for non-qualified investors, limiting purchases to no more than 600,000 rubles-worth (about $7,740) of digital assets in one year.