Currently, the Russian Federal Taxation Service (FTS) is actively monitoring the crypto market to prevent tax evasions, according to FTS head Daniil Egorov. The Russian State Duma approved a bill on cryptocurrency taxation in early 2021, but the bill is yet to move any further.
Cryptos can possibly cause considerable erosion to the Russian tax base. Egorov argued on November 22, 2021, in an interview with the local publication RBC that crypto may destabilize some sectors of the country’s economy.
However, crypto transactions are still traceable and have to be reported, as stated by the official. He also added that the FTS is now ready to deploy the automated tracking systems to process some of the big data volumes. Egorov declared:
“When you get into the digital space, you still leave a trail somewhere. And it’s a matter of time before this trail is identified.”
The official also said that the FTS is now coming up with various ways of responding to cryptocurrency tax evasion practices as the authority aims to curb these activities instead of just identifying them. He added:
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“We would like to find solutions that shut down a problem as a phenomenon rather than just identifying actions by a specific player.”
Cryptocurrency Tax Regulation In Russia
The Russian State Duma said in a bill on crypto taxation in the first reading in February this year, needing the residents to report cryptocurrency transactions of a total amount that exceeds $7,800 per year. Legislators decided to assign a responsible committee to carry on with the second reading. The State Duma Committee on Budget and Taxes was a perfect choice and it was selected in mid-October.
Based on a statement by the founder of the Russian crypto event Blockchain Life, Sergei Khitrov, Russian cryptocurrency businesses may possibly generate up to $4 billion worth of taxes annually. According to him, the local cryptocurrency community has demonstrated a ‘complete failure’ to comprehend how to pay taxes on cryptos.
This news comes as American legislators fight back against the changes to tax reporting rules for the cryptocurrency transactions more than $10,000 in the newly passed infrastructure bill. The bill was originally approved by the Senate in August. It was met with a strong proposal for a compromise amendment by six senators, who include pro-Bitcoin (BTC) Senator Cynthia Lummis.