More Russians are disclosing their cryptocurrency incomes: Report

Russian news agency Izvestia reports on Thursday that Russians have been disclosing their income from crypto trading for tax purposes. The report mentions data from consulting and law firms such as KPMG, PricewaterhouseCoopers, FTL Advisers, as well as Moscow-based public policy think tank the Center for Strategic Research.

FTL Advisers’ partner Maria Kukla stated:

“We’ve observed that Russian residents have started voluntarily disclosing income from operations with digital assets, mainly with cryptocurrency, in tax declarations.”

As reported by Cointelegraph, she also indicated that it’s still early to determine whether the tendency will become widespread. The currency tax reporting period ends on May 1 and, per Kukla, much could change before then.

Evgeny Sivoushkov, director of PwC Russia’s division of individual taxation, stated that interest in disclosing crypto holdings has increased during the ongoing tax declaration period. According to Sivoushkov, the new trend was fueled by the adoption of Russia’s crypto law “On Digital Financial Assets,” as well as the increased focus of tax authorities and compliance services on the origin of income and Russians’ foreign assets.

The reported surge in the number of crypto tax filings comes despite Russia not having officially enforced any dedicated legislation related to cryptocurrency taxation. Nonetheless, according to Izvestia’s sources, the Federal Taxation Service of Russia states that the procedure of crypto income taxation by individuals is formally described as part of a letter by the Ministry of Finance issued in May 2018.

The tax base from crypto trading is defined in Russian rubles as the “excess of the total income amount received by taxpayers from the sale of a cryptocurrency over the total amount of documented expenses for its acquisition,” according to the letter.