How To Pay Mining Tax In Russia In 2022
After the ban on cryptocurrencies in China, the Russian Federation ranks 3rd in the world regarding coin production, after the USA and Kazakhstan. Mining business brings good income. According to the tax legislation of the Russian Federation, the extraction of digital currencies is no different from other types of entrepreneurial activity. In this article, we will tell you how to pay mining tax in Russia in 2022. Legislators offer 3 ways: to submit a 3-NDFL declaration as an individual, to obtain the status of self-employed, or to register a business.
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Digital Assets Law
Since 2021, cryptocurrency in Russia has been recognized as property. Coins can be used for settlements with creditors in bankruptcy cases when dividing property. It is also allowed to enter into official transactions with digital assets.
The law prohibits the use of virtual currency for online and offline payments. Mining is not documented. However, as a general rule, any activity that makes a profit is taxed. The initiative is under consideration in the State Duma. Other proposals include the legalization of mining and the introduction of fines for non-payment of taxes. The amendments are expected to be adopted by early 2023.
How to pay mining tax
Under the law, coin mining is no different from other types of entrepreneurial activity. The user buys the equipment, rents the premises, and profits from using the property. Therefore, deductions to the budget must be made on a general basis. The order is this:
- Calculate the tax base. Subtract expenses from the total income for the past year.
- Submit a declaration for the last year in the form of 3-NDFL. The submission deadline is April 30. The form must be accompanied by checks and an explanatory note with a methodology for calculating profits.
- Wait for the results of a desk audit by an employee of the Federal Tax Service.
- Pay tax by June 15th.
Declaration of income
Miners must submit annual reports to the Federal Tax Service, regardless of income. The taxable base must be calculated independently. It is necessary to take into account all expenditure and income transactions.
Each transaction is documented. It is required to attach receipts, an offer of a crypto-exchange, and an agreement. Screenshots of correspondence with the exchange office will not work; official documents are needed. Cryptocurrency can be classified under code 41 (goods) or 58 (financial investment).
Tax calculation
In the presence of supporting documents, individuals pay income tax. The regular rate is 13%. If there are no receipts and checks, the tax base is considered the entire profit from the sale of assets.
The law equates cryptocurrency to property. If the owner owns the coins for more than 3 years, the tax does not need to be paid. But a declaration is required. The explanatory note should list receipts to the account and outgoing transfers. The procedure for paying tax by different categories of miners is presented in the table.
| STATUS | INCOME (RUB.) | TAX RATE |
|---|---|---|
Registration of IP
To simplify reporting, miners can get the status of an individual entrepreneur. When opening a bank account, IP is issued free of charge. You can withdraw cryptocurrency in rubles only to this account. To obtain the status of an individual entrepreneur, you must specify the OKVED code:
- “Data processing, provision of information storage services” – 63.11.
- “Creation and use of databases and information resources” – 63.11.1.
Entrepreneurs can choose the tax rate, considering the type of calculation. The available options are shown in the table.
| BASE FOR CALCULATION | RATE | COMMENT |
|---|---|---|
| Profit from the sale of virtual currencies | Suitable for users who cannot verify expenses | |
| The difference between profit and expenses | Preferred scheme for users who plan to rent a room, buy equipment, pay for electricity |
Self-employed status
This way of registering a business is suitable for miners who do not plan to hire employees. The upper limit of income should not exceed 2.4 million rubles.
You can get the status of self-employed by filling out a form on the FTS resource or through the application. In this case, you do not need to submit a 3-NDFL report. Every month, the user fixes income, and expenses and pays 4% of the net profit.
Liability for Tax Evasion in Mining
By law, officials and their relatives must submit annual reports on cryptocurrency ownership to the Federal Tax Service. Otherwise, a fine of 50 thousand rubles and 20% of digital assets (at the exchange rate in rubles) is imposed on them. The deadline for submitting the report for the last year is April 30 of the current year.
You must submit a declaration even if the owner did not withdraw assets to fiat. In the new bill, officials propose reporting virtual currency ownership to all citizens with an annual turnover of more than 600 thousand rubles. The government also plans to increase the statute of limitations for tax violations from 3 to 5 years. The current list of tax violations and fines is presented in the table.
| TAX CRIME | PUNISHMENT |
|---|---|
| Failure to submit the declaration within the prescribed time limit | 5% of the amount for each month of delay, but not more than 30% |
| Late payment of fees | Penalty charged, no penalty |
| Lack of a report and non-payment of tax until June 15 | Penalty 20% (40% in case of deliberate evasion) of the amount and interest at the refinancing rate for each day of delay |
| Money laundering (lack of evidence of the origin of digital currencies) | The minimum amount of the fine is 120 thousand rubles; the maximum punishment is a prison term of up to 7 years |
| Failure to provide information about opening an account in a foreign jurisdiction and the movement of funds | The fine can be 70-100% of the balance of funds. |
In 2022, Russian banks, following the instruction of the Central Bank, classify transactions with virtual currencies as suspicious. They track such receipts on bank cards:
- One-time transfers – more than 40 thousand rubles daily, over 50 thousand rubles. Per month, from 600 thousand rubles. In year.
- More than 10 transactions per day from different persons.
- No card spending.
- Cash withdrawal from an ATM after receiving the transfer within one banking day.
- Sending money to the account of a third party immediately after crediting.
The miner needs to keep checks and receipts for transferring coins and take screenshots and videos of transactions in his account. These documents are proof of earning and selling digital assets.
Summary
Russian legislation considers cryptocurrencies valuable property, and mining is a way to get them. Income from mining coins is subject to taxation. The owner of a small farm can pay the fees as an individual or become self-employed. Miners with powerful equipment should open IP. For evasion of payment of fees, fines are provided – up to 40% of the amount and penalties for each day of delay.
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