​Russia’s Ministry of Finance proposes to oblige miners to declare their income

What’s new? Deputy Finance Minister of the Russian Federation Alexey Moiseev has proposed to oblige miners to report their income to the tax authorities. According to the draft law sent to the Ministry of Economic Development, Ministry of Justice, the Federal Taxation Service, the Bank of Russia, and other departments in February, in case of violation, participants of cryptocurrency mining will face criminal liability, providing up to four years of imprisonment. Baza reports, citing the document.

Baza’s material

What else does the publication report? According to Moiseev’s letter, a meeting with the Deputy Head of the Government Office, Ilya Trunin, at which the Ministry of Finance was instructed to finalize the draft law on mining, was held in January. Earlier Moiseev explained the delay in the adoption of the draft law by disagreements between the Ministry and the Central Bank and law enforcement agencies.

The new version of the draft law states that miners will be required to “provide information on receiving digital currency” to the tax authorities, as well as report the address identifier of the crypto wallet. The information must be presented “in the manner and time established by the legislation of the Russian Federation on taxes and fees,” which have not yet been precisely defined.

Among other things, the Ministry of Finance proposed amendments to the Criminal Code, which provide for up to two years in prison and a fine of up to 300 000 Russian rubles (RUB) for miners who evaded declaring income for three years at least twice. In question are incomes over 15 million RUB. If the amount is more than 45 million RUB, the punishment is up to four years in prison, forced labor for the same period, and a fine of up to 2 million RUB. Earlier, the Ministry of Finance supported the tax rate for miners in the amount of 7-20%.

It is also proposed to impose penalties for the “illegal organization of the circulation of digital currencies.” At the moment, the draft law on mining suggests two ways of selling cryptocurrency for fiat: on foreign exchanges or on the Russian platform within the experimental legal regime, which is under development.

It is also reported that Russia will create a register of digital asset exchange operators, which could be banks and other legal entities. Anything that does not fit into this framework will be considered a violation, which could lead to up to seven years in prison, a fine of up to 1 million RUB, and forced labor for up to five years.

An amendment to the Anti-Money Laundering Law has also been added. According to Baza, owners of cryptocurrencies “are obliged to provide the authorized body at its request information about their transactions with digital currency.” The draft law also states that “transactions with digital currency <…> are made by a person who has mined this digital currency <…> in their own name, at their own expense, and in their own interests.”

In January, the Energy Commission of the State Council of the Russian Federation proposed a complete ban on mining in residential buildings, as well as in energy-deficient regions. Restrictions could be sent to the State Duma as part of separate draft laws.

In February, Anatoly Aksakov, Chairman of the State Duma Committee on the Financial Market, reported that Russia may impose liability for miners who mine cryptocurrency illegally. According to him, in the first half of 2023, two draft laws will be adopted: on mining and on liability for “gray” mining.