What Will The New Tax Service Binance Give Russians?

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  The world's largest cryptocurrency exchange in terms of trading volume, Binance, launched a new service on July 28 that will help user...

 The world's largest cryptocurrency exchange in terms of trading volume, Binance, launched a new service on July 28 that will help users pay taxes on transactions with digital assets, writes RBC Crypto.

With the new tool, it will be possible to generate capital gains and loss reports on the marketplace, as well as check local tax liabilities and obtain transaction history for more than one fiscal year. The experts explained how the new service could make it easier for residents of Russia to comply with tax laws.

Tax regime

Since January 1, 2021, cryptocurrency has been recognized as property on the territory of Russia. This allows you to conclude formal transactions with its use. Russians have such an opportunity thanks to the law "On financial digital assets", which entered into force at the beginning of this year.

At the end of the financial year (until April 30), a Russian citizen working with cryptocurrency must establish whether he was able to make a profit as a result of transactions for the purchase and sale of digital coins, and then pay personal income tax on this profit.

To do this, you need to submit the personal income tax form-3 to the Federal Tax Service, attaching extracts from the cryptocurrency wallet and a printout with exchange rates on the date of exchanging cryptocurrency for fiat currency (Russian ruble). You can submit documents to the Federal Tax Service at the place of registration (in person or by mail), or through the taxpayer's personal account on the department's website.

New functionality

The service launched by the Binance exchange will definitely be useful to those users who need to prepare a tax report and calculate the amount of tax on cryptocurrency transactions, says Efim Kazantsev, a member of the Commission on Legal Support of the Digital Economy of the Moscow Branch of the Russian Lawyers Association.

According to him, the site announced the possibility of integration with external services for calculating and paying taxes, but it is still difficult to say whether the list of integrated services will include Russian companies that help calculate and pay taxes.

“Even if Russian services are not integrated into Binance, the information from the new reporting system will be useful to users from Russia for self-preparation of tax reports and calculating the amount of taxes payable,” the expert explained.

Documentary confirmation

The Federal Tax Service and the Ministry of Finance of Russia in their explanations indicate that the tax on income from operations with cryptocurrency is paid by individuals on a general basis, says Dmitry Kirillov, a teacher at the Moscow Digital School. That is, the income from the sale of cryptocurrency is reduced by the amount of documented expenses for its purchase and is multiplied by the personal income tax rate.

According to Kirillov, documentary confirmation of expenses by uploads from the user's personal account on the crypto exchange is very important, and if the tax authority has questions about the form or content of such uploads, the tax deduction may be refused.

“The new Binance tool will make it easier to document the costs and, I hope, will remove some of the questions of the tax authorities,” said Kirillov.

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