“Offshore exchanges will pay taxes in Russia,” – attorney Maria Agranovskaya


  • How the life of the Russian cryptocurrency market will change after the adoption of the law

  • Crypto exchanges must pay taxes to the state treasury

  • FATF requirements will be taken into account in the work of crypto exchanges

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The adoption of the law “On digital financial assets” actually legalized the circulation of cryptocurrency transactions in Russia, but at the same time prohibits the use of digital coins as a means of payment. On the other hand, the new law has tightened the requirements for the exchanges themselves. Great attention is now being paid to taxation and registration of cryptocurrency platforms. Experts are sure that it will be much more difficult to hide from the tax authorities in an offshore zone. How the adoption of the law will affect the Russian crypto market, BeInCrypto spoke with lawyer Maria Agranovskaya.

– Maria, now the main agenda for the cryptocurrency business in Russia is the adoption of the law “On digital financial assets”. In fact, the activities of the crypto business were legalized, but it is still impossible to use coins for payment. How critical is this for Russian users?

M.A .: The law was and remains highly controversial. This compromise option, unfortunately, does not clarify for many sides of the business related to cryptocurrencies and “digital assets”.

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By no means all activities that can be called “crypto-business” have been legalized: payment for goods and services using “digital currencies” is still impossible. however, there is still no clear classification of “digital assets” and the distinction with “digital currencies” (“CV”) neither in the legislation nor in the explanations. The broad competence of the regulator allows it in a number of cases to replace the law by issuing new rules. For example, about “CV” – there is no law yet.

The latter became the subject of a fierce debate: it was proposed to ban almost all activities with CV, on pain of criminal punishment or an administrative fine. At the same time, the terminological apparatus of the proposed acts left a huge number of questions. Bonuses, for example, in some cases can be considered as “CV”. Of course, a much clearer distinction will be required between the different types of “CFA”, “CV” and uncertified securities, electronic vouchers and other elements of e-commerce.

Mining is also currently in the gray zone. A transition period is expected until early 2021. You can try turning to the regulator and working in sandboxes, however, not everyone will get there.

Possible, within limited limits, activity through operators of exchange and issuance of CFA (not CV).

It is forbidden to disseminate information about the offer or acceptance of CVs as a counter-provision or other method allowing to assume payment for CVs for goods (works, services).

So, digitalization in Russia of a number of enterprises or assets has become possible – however, interaction with the international cryptocurrency market is almost still closed..

Attracting investments from abroad (not under Russian law), entering international exchanges, working with foreign assets are not properly regulated.

– How can Russians buy cryptocurrency? What are the options?

M.A .: Digital currencies are recognized as a set of electronic data (digital code or designation) contained in information system, which are offered and (or) can be accepted as means of payment, which is not a monetary unit of the Russian Federation, a monetary unit of a foreign state (…), and (or) as investment and for which there is no person obliged front every owner such electronic data, with the exception of the operator and (or) nodes of the information system, which are only obliged to ensure that the procedure for the release of these electronic data and the implementation of actions in relation to them to make (change) entries in such an information system with its rules.

At the moment, until the adoption of the law on CVs and clarifications on the procedure for declaring CVs, everything remains the same. Working with CVs in a completely legal manner is possible through foreign companies from countries in which this activity is supported and regulated.

“Organization of issue, issue, organization of circulation of digital currency in Russia should be regulated by federal laws”, however, they have not yet been adopted.

It is also important to keep in mind the need to determine the status of CVs and various types of CFAs as “property” for tax purposes – in terms of taxation of VAT, in particular.

Payment tokens and CVs are not separated in our legislation as is customary in a number of countries. It seems useful to use in Russia the experience of the success of other countries.

 – Today Sberbank announced the possibility of issuing a ruble stablecoin. How realistic is this? And why does a bank need stablecoins if cryptocurrency is not used as a means of payment?

M.A .: Of course, this is real, if there is such a political will (like the digital yuan, China’s financial regulator has been working on creating a digital asset for several years. During this time, a large number of … More). At the same time, what kind of ruble “stablecoin” is it? If the regulator has in mind the issue of a certain digital twin of the ruble, it is necessary to determine its status. The previous version of the law included “digital operational signs”, which did not differ from CV in almost anything, except for the issue authorized by the Central Bank.

Probably, this issue will require substantial study – there is no legislative basis for today. Ruble-denominated “stablecoins” that are tied to assets in Russia are governed by the new CFA law.

Such currencies could be used on the international crypto market – however, what the level of trust in them would be unclear (due to the fact that it would be a tightly controlled centralized history).

– How will the adoption of the law affect the tax system? Are exchanges required to pay taxes? If yes, what?

M.A .: The adoption of the law on CFA will not affect the tax system: it will affect the obligations of taxpayers to declare assets issued in accordance with this law.

It should be noted that non-compliance with the declaration requirement – in the absence of such rules for today and contradictory practice – deprives citizens of the right even to judicial protection, which we wrote about in the explanatory notes from our Expert Council on the Digital Economy under the Committee of the State Duma of the Federal Assembly of the Russian Federation on Entrepreneurship.

It is imperative to provide an opportunity to declare your assets in any form and pay taxes – but so far there are no clear rules and coordination of actions of the Central Bank and the Ministry of Finance with tax authorities is also not observed.

We will look forward to developing the rules during the fall and inform you accordingly.

“Offshore exchanges will pay taxes in Russia,” - attorney Maria Agranovskaya

 – How the launch of stablecoin, if this happens, will affect the banking system of Russia?

M.A .: The launch of stablecoin is still far from reality, the concept itself is now abstract. It’s premature to talk about it seriously..

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Such a step will not significantly affect the banking system – the volume of transactions and the market associated with them is too small compared to the real banking sector outside the crypto market. However, it essentially depends on the specifics and political will of the regulator and the state..

– I would also like to know about the registration of exchanges. It is no secret that many companies are registered in offshore zones, such as Cyprus and the Cayman Islands. But now the situation with Cyprus is not the best. How events will affect the operation of the exchange?

M.A .: It all depends on the circumstances. Exchanges can have the same consequences as for companies in other areas..

First of all, Russia’s termination of double taxation treaties is now relevant (as announced more than a month and a half ago, Cyprus is already in the process, followed by Malta, Luxembourg, even possibly Holland): this may affect dividends and royalties, in first of all. However, if, as a result of the termination of agreements, the countries are included in the “black lists” of the Ministry of Finance, Russian beneficiaries may receive a “pleasant” obligation to pay tax on retained earnings, for example. This is valid for countries with which there are no such agreements – such as the BVO and the Caymans, Labuan and others..

BVO, Caymans – the status in this sense remained unchanged. Another question is that under pressure from world leaders, most of the offshore companies have already had to ensure the disclosure and transparency of information, as well as the requirement to localize offices (“essence” – there must be an office, director, etc. to apply benefits).

Anti-money laundering requirements have increased significantly – and laws in most offshore companies have become stricter. Accordingly, prices have increased.

(!) In connection with the adoption of the Law on CFA and the expected adoption of the law on CV, it can be expected that the profits of offshore exchanges in cryptocurrencies will be taxed in Russia. At the moment, it is impossible to comment on this unambiguously, now there is no reason – but it is worth tracking changes in this vein.

 – What will happen to mining in Russia? What are the chances that it will be legalized?

M.A .: Frankly speaking, I do not like to evaluate the chances – a thankless task. There were many discussions regarding both the tax base (for example, based on the calculation of energy consumption, which does not take into account the development of technology), and control over the release, but there is no consensus in the final form.

It remains to be hoped that the regulator will take into account the need to legalize activities and still determine the possibility of working for miners.

The first foundations have already been laid by the Law on CFA, but this is not enough. It is also unclear how to use the received crypto funds and enter the international market with them..

– Thanks for the conversation!



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“Offshore exchanges will pay taxes in Russia,” - attorney Maria Agranovskaya
“Offshore exchanges will pay taxes in Russia,” - attorney Maria Agranovskaya
“Offshore exchanges will pay taxes in Russia,” - attorney Maria Agranovskaya
“Offshore exchanges will pay taxes in Russia,” - attorney Maria Agranovskaya

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