Currency exchange tax: what will happen to bitcoin

In Russia, he proposed to tax currency speculation. How real is it and how to be users of digital money

Former adviser to the Russian President Sergey Glazyev proposed to introduce a tax on currency speculation to stabilize the ruble exchange rate and avoid a wave of inflation. According to the academician, as a result of the 2020 crisis, Russia was in the lead in terms of the scale of the devaluation of the national currency. Among the main reasons: the central bank rate, the floating rate of the ruble and the "dominance of speculators" in the Russian currency market, writes Ura.ru.

"About 80% of all transactions in the foreign exchange market are carried out by speculators. Industrial turnover, investments, gross product do not grow, but the volume of exchange trades fluctuates sharply. This shows that speculators are manipulating our market. Each devaluation of the ruble is the flow of money out of the country, which for the most part disappears forever. This makes it impossible to plan investments," Glazyev explained.

One of the methods of limiting transactions with the ruble, he called the tax on the volume of currency speculation. Thus, it will be possible to stabilize the exchange rate of the national currency, the ex-adviser of the president of the country is sure.

"Cryptocurrency is not equal to currency"

Some cryptocurrency exchanges also support trading pairs with the ruble. For example, last December they appeared on one of the largest retail volumes of the Binance site. However, according to Antonina Levashenko, head of the Russian Center for Competence and Standards Analysis of the OECD under the President of the Russian Federation, a teacher of Moscow Digital School, digital money, such as bitcoin, cannot be attributed to currency values in accordance with Russian law.

"The tax on currency speculation means the de facto recognition of such action is possible and the right of the state to earn on it. In addition, it is impossible to put equally between cryptocurrency and currency in the meaning of the legislation on currency regulation. However, according to the experience of foreign countries, the regulation of tax rules often applies to similar relationships that arise when making transactions with cryptocurrencies, for example, capital gains taxes or rules of taxation of barter transactions can be applied," Levashenko explained.

She added that in the world currency exchange transactions are not taxable, especially in terms of VAT. At the same time, in Russia, the exchange of cryptocurrencies for fiat is a provision of services.

"In the case of cryptocurrency exchange for fiat currency, there is a direct link between the services provided and the remuneration received by the taxpayer. Similar conclusions were formulated in the practice of the EU court. According to Art. 148 NK of the Russian Federation providing services, the place of implementation of which is recognized by the Russian Federation, is subject to value-added tax (VAT). Cryptocurrencies actually serve as a contractual means of payment, acting in public relations as a means of payment and is essentially money (currency), although this is not defined in Art. 140 GK of the Russian Federation and the "On Currency Regulation and Currency Control" - the expert said.

Transactions related to the circulation of Russian or foreign currency (except for the purposes of numismatics) are not recognized as selling goods, works or services. Thus, VAT should not be applied to cryptocurrency exchanges for fiat currency, Levashenko concluded.

"You can introduce any taxes in Russia"

Currently, there is no regulation of cryptocurrencies in Russia, the authorities are considering two laws "On the CFA" and "On the digital currency." The second document in the current version assumes a complete ban on a new type of assets in the country, as well as criminal and administrative responsibility for its violations.

The draft law was criticized not only in the community, they are also dissatisfied with the ministries. For example, Deputy Justice Minister Denis Novak explainedthat the document creates uncertainty regarding the sale of cryptocurrencies within the framework of executive proceedings. After that, the documents were found to be unsatisfactory, said Elina Sidorenko, head of the working group of the State Duma of the Federal Assembly of the Russian Federation, assessing the risks of cryptocurrency turnover. She said that the bill "On digital currency" needs to be finalized, and its further consideration in the State Duma is likely in the autumn.

The CEO of Sun Crypto Management Egor Vinogradov called the most transparent and understandable scheme of taxation of cryptocurrencies the introduction of their turnover through licensed market participants. For example, brokers who, if you make a profit, will have to pay tax on their clients.

Evgeny Matsak, a lawyer and partner of the Globallaw International Center for the Protection of Rights, called Glazyev's proposal a "populist" proposal by a former adviser to Russian President Glazyev. Matsak argues that the floating rate of the ruble was introduced by the Central Bank in order to exclude the artificial containment of the ruble followed by a sharp devaluation (as was the case, for example, in the crisis of 1998).

"In Russia, you can introduce any taxes, and the same examples with the recent increase in VAT (from 18% to 20%), with the president's proposal to increase the NDFL rate from 13% to 15% from revenues over 5 million rubles per year, with the taxation of the NDFL from 2021 coupon income on Russian bonds - this eloquent evidence. I would not be surprised if the Ministry of Finance decides to make additional money on the taxation of foreign exchange transactions," the expert said.

The legal obstacle to the introduction of a special tax on currency transactions may be the fact that today such income is physical. NDFL, organizations are subject to income tax, explained Denis Savin, a lawyer at BGP Litigation. There is a double taxation, so the easiest option in this case is to increase the rates on income from this type of operations, rather than the introduction of a special tax. The turnover of cryptocurrencies will not directly affect this offer, as it relates to currency transactions, Savin concluded.