The bill providing for new taxation and reporting rules with respect to cryptocurrency circulation has been recently approved in the first reading by the Russian Parliament.
At the same time, the Presidential Council for Codification and Improvement of Civil Legislation did not support the said bill. Indeed, now the Civil Code does not provide for a concept of cryptocurrency, and digital rights are defined as obligatory and other rights named in this capacity in the law. In the law on digital financial assets, digital currency is considered as a form of legal tender with limited use. As a consequence, there is legal uncertainty as to the legal status of cryptocurrency. According to the Council, the establishment of a tax regime for cryptocurrency circulation is not be advisable without clarifying the range of objects that can be classified as cryptocurrency.
We note that it is not unusual in Russia that the Tax Code introduces a new tax regime in the lack of sufficient civil law regulation. In practice, this leads to numerous discrepancies and difficulties of practical application of legislative provisions.
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NAZALI TAX & LEGAL |