Russia’s Ministry of Finance has released new amendments to an upcoming bill on cryptocurrency that still includes potential jail sentences for not disclosing crypto holdings.
According to local Russian publication RBU, the Finance Ministry has created amendments to its upcoming On Digital Currency bill that is expected to come into effect in early 2021.
While the amendments have relaxed some of the harsh changes to the bill that were published in September 2020 which included the original introduction of potential criminal action and jail time, industry commentators still feel that the rules are too harsh.
Increased threshold of cryptocurrency trading for declarations
RBU’s report outlines the amendments that the Finance Ministry have made to the Criminal and Criminal Procedure Codes of Russia which could see cryptocurrency users imprisoned for up to three years for failing to report cryptocurrency trading and transactions at least twice in three years in amounts that exceed 45 million rubles (~$580,000).
The amendments are primarily to the threshold of the value of cryptocurrency transactions, with the September amendments requiring declaration of cryptocurrency transactions that exceeded 5 million rubles, or ~$64000, in value.
The Russian Finance Ministry has also proposed amendments to the tax code, anti-money laundering legislation as well as the Code of Administrative Offenses all of which are in an effort to reduce money laundering according to a press release from the department.
What it means for Russian crypto holders
The major takeaways from the new amendments will require cryptocurrency users to disclose certain information to the Russian tax authorities.
Crypto users in Russia will have to declare when they receive or obtain cryptocurrency, their transactions using cryptocurrency and their wallet balances on the condition that the value of transactions exceeds 600,000 rubles in a calendar year – an increase from the 100,000 ruble threshold set out in September’s proposed amendments.
These values will be worked out based on the market price of the cryptocurrency when transactions occur. Cryptocurrency users in Russia will be expected to declare their holdings by April 30, 2022.
Cryptocurrency exchanges and mining operators will also have to declare transaction information to Rosfinmonitoring.
A 50,000 ruble fine is on the cards for cryptocurrency users that fail to file the necessary information to tax authorities on time.
The report also notes that failure to pay tax on any trade earnings or holdings of cryptocurrency could result in a 40 percent fine of the amount of unpaid tax.