Russia is preparing a tax system for cryptocurrency: the abolition of VAT and benefits to miners

Russian lawyers began to develop a system for taxing digital assets. It needs to be prepared even before the adoption of a specific law , since the application of general rules of taxation with respect to virtual assets may result in numerous problems.

The topic of tax implications for operations with cryptocurrencies was discussed on July 30 at a meeting of the commission on the legal support of the digital economy of the Moscow branch of the Russian Bar Association. Following the results, the commission will form proposals for amending the Tax Code. They will be sent to the Ministry of Finance, Federal Tax Service, Central Bank, Ministry of Digital Development and the State Duma.

The basic idea of market participants is to equate all types of tokens to property rights. Among the main proposals are the provision of tax benefits to miners , the abolition of VAT on operations with cryptocurrencies, the creation of a unified system of cross rates for monetary measurement of tokens and a number of others.

The proposal to exempt digital rights transactions from VAT, and also to exclude the collection of income tax from citizens who sell digital assets after a year of continuous possession of them, was approved by the commission unanimously. According to its members, these measures are consistent with the best international practices (in particular, the experience of Germany and Singapore).

There was a similar reaction to the proposal to extend preferences to miners. In particular, in relation to the miners-IP to apply the patent taxation system, which requires accreditation in the Ministry of Digital Development, as well as disclosing to the tax authorities the details of the crypto wallet of such an entrepreneur.

Mikhail Uspensky, partner at Taxology law firm:

“A patent is bought for a fixed fee per year, each region determines the amount of payment itself. The mode is simple and clear, it will allow miners to get out of the shadows, not to be afraid of possible confiscation of equipment, which will create a positive climate in the industry. ”

Recall, the other day the Iranian government decided to consider mining cryptocurrency a separate legal branch of industrial production. According to the new law, anyone in Iran will be able to legally engage in the extraction of cryptocurrency, having received a special license for this from the Ministry of Industry, Mine and Trade.

Publication date 07/31/2019
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