To ban crypto or to tax, that seems to be the question.
Russia’s Ministry of Finance is continuing to push regulations for the cryptocurrency industry by proposing new tax requirements.
The ministry now reportedly wants to introduce criminal liability for failure to declare taxes on crypto, including prison terms of up to three years.
According to a Sept. 24 report by Kommersant, the ministry proposes that individuals who fail to report an amount of over 1 million Russian rubles ($13,000) in annual crypto operations should serve a three-year prison term or hard labor.
The ministry also proposed major fines for smaller unreported amounts. As such, any physical or legal entity in Russia would have to report their annual crypto income if its amount exceeds 100,000 rubles ($1,300). Failure to report such amounts are subject to fines of 30% from the total amount of crypto assets held, but no less than 50,000 rubles ($650), the report notes.
The authority also proposes to require local cryptocurrency exchange services to report transactions on taxes every quarter.
According to Kommersant, the new proposals refer to both Russia’s new crypto law “On Digital Assets” and the upcoming bill “On Digital Currency.” In the current version of the law “On Digital Assets,” Russian lawmakers do not provide either taxation rates for crypto, or general rules to report those transactions.
It is not immediately clear what kind of crypto transactions the ministry wants to tax, as the authority only recognizes a few ways to obtain crypto. In early September, the ministry proposed a blanket ban on any crypto transactions except for obtaining it through three methods: inheritance, bankruptcy and enforcement proceedings.