This week, the Federal tax service (FTS) of Russia has sent downstream to the tax authorities the Ministry’s letter, which States that the tax base on operations of purchase and sale of cryptocurrencies is the excess of the proceeds from the sale on documented expenses for their purchase.

The Finance Ministry says that the law of the Russian Federation the legal status of cryptocurrencies is not defined, and a special procedure of taxation of incomes of physical persons in the transactions with them is not installed. But the Tax code (NK) the Russian Federation requires to be interpreted in favor of the taxpayer, all unremovable doubts, contradictions and ambiguities of legislative acts on taxes and fees, and income recognized economic benefits.

On this basis, the Ministry of Finance believes it is possible – before the advent of legislative regulation – in determining the tax base for income received from transactions with cryptocurrencies, based on the provisions of the first paragraph of subparagraph 2 of paragraph 2 of article 220 of NK of the Russian Federation:

“Instead of receiving a property tax deduction the taxpayer is entitled to reduce the amount of their taxable income to the amount actually paid them and documented expenses associated with the acquisition of this property.”

The Ministry considers that individuals must self-assess tax on transactions with cryptocurrencies and represent in tax authority the Declaration.

Elina Sidorenko, head of the working group on risk assessment circulation of virtual currencies, commented on the news in your telegram channel, noting that at the moment, FNS had not even begun to establish a system of administration tokens and crypto-currencies:

“This means that all the talk about the necessity of paying taxes with cryptocurrency income nothing but talk. There is no regulatory status of cryptocurrencies and, therefore, it is unclear what is taxable. There is no algorithm taking into account income, because legally it is difficult to determine the course of what is not. There is no objective and technical prerequisites for crypto-currency with transactional taxes are paid in Fiat currency. The state Duma had not even started to develop a question on the taxation of cryptocurrencies”.

Recall that in late may the Russian state Duma has approved in the first reading a bill to regulate cryptocurrency, introduced in the lower house on March 20, the group of deputies headed by Anatoly Aksakov. The basis of the bill was a document published by the Finance Ministry on January 25.