It has been reported that Russian taxpayers are now declaring their crypto earnings prior to Duma legislation being passed in the country.
Many European countries are currently tackling their tax laws in the light of the increasing popularity of cryptocurrencies and a rapid rise in digital currency adoption.
France is a case in point. French daily Le Monde noted earlier this year that the crypto tax rate would be lowered after citizens appealed to France’s highest regulatory body to change the regulations for crypto transactions that had been in place since July 2014. The Conseil d’Etat set the new crypto tax rate at 19%, dropping it from a huge 45%; reportedly the move was specifically aimed at Bitcoin.
Poland also changed its original position on cryptocurrencies in that country, as part of a thorough analysis of the crypto space, announcing that it would be temporarily suspending tax collection for digital currencies, in view of tax legislation not being in place. Again, as in France, public demand was a driver behind the government changing its tax policy.
In Russia, the tax situation is very much in limbo while the Duma comes to a decision as how to deal with cryptocurrency earnings. Results from this year’s tax campaign show that investors appear to have taken the matter into their own hands, prior to any government action, declaring their cryptocurrency in their April tax returns. Income tax in the country currently stands at only 13%.
The situation in light of the current status quo, without specific legislation, requires Russian citizens to adhere to current tax laws. The tax base for earnings in cryptocurrency payable in Russian currency, the ruble, is aimed primarily at an accrued profit; the excess amount of the total received from the sale of cryptocurrency over the buying price.
New laws will also come into effect next year which will address those engaged in crypto-related activities, including mining and trading, which also extends to both owners and clients of cryptocurrency platforms. These laws have been implemented due to a huge 12% of the population earning a living as their main source of income through cryptocurrency activities.
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