The State Duma adopted in the first reading a bill introducing taxation of income from operations with cryptocurrencies. The document was submitted to the parliament by the government.

The document proposes to recognize digital currency as property for the application of the Tax Code. As Prime Minister Mikhail Mishustin explained earlier, this will allow the owner of the cryptocurrency to count on legal protection and defend his rights in court.

The project provides that income from digital currency transactions will now be subject to income tax or personal income tax. Citizens and organizations entitled to dispose of cryptocurrency will have to submit a declaration if the amount of transactions with it exceeds 600 thousand rubles per year. At the same time, digital currency will not be subject to depreciation, and transactions related to its circulation will not be subject to VAT.

In case of non-payment or incomplete payment of tax, a penalty of 40 percent of the required amount is imposed. For failure to submit, untimely submission or submission of a declaration with inaccurate information, a fine is established in the amount of ten percent of the receipt of undeclared digital currency or the amount of writing off such currency (the largest of the two amounts is chosen). For violation of the terms of declaration, the fine will be 50 thousand rubles. The tax service will be able to request from banks statements of accounts of individuals that were used for transactions with digital currency.

The State Duma Committee on Budget and Taxes, when finalizing the draft for the second reading, intends to clarify which transactions are exempt from VAT and who is obliged to inform the tax authorities about obtaining the right to dispose of digital currency, to submit reports on transactions with it and on its balances. The committee also questions the validity of granting the FTS the right to establish the procedure for determining the market price for digital currency, since this does not comply with the provisions of Article 40 of the Tax Code.