According to the draft law, tax residents will be required, by 30 April of the year following the reporting year:

∙ To notify the tax authorities of acquiring the right to dispose of digital currency, including through third parties,

∙ To submit reports on transactions involving digital currency and on the balances of such digital currency in accounts.

The notification and report must be submitted if, during a calendar year, the amount of inflows or outflows of digital currency exceeds RUB 600,000.

Failure to submit the notification on time carries a fine of RUB 50,000.

Failure to submit to the tax authority a report on transactions involving digital currency and on balances of digital currency, or submission of such a report containing false information, may result in a fine of 10% of the higher of the two amounts in ruble equivalent — the amount of inflows or the amount of outflows of digital currency.

Failure to pay, or partial payment of, tax as a result of not including profits (income) from transactions settled using digital currency in the tax base may entail a fine of 40% of the amount of tax unpaid.

It is expected that the first reporting period will be 2021, meaning that the documents will need to be submitted to the tax authorities by 30 April 2022.

⠀

We will be pleased to answer any further questions.