Russia’s tax boss says cryptocurrencies can break through the tax base

The Russian Federal Tax Service (FNS) is actively monitoring the cryptocurrency market to prevent tax evasion, said Daniil Egorov, head of the FNS.

Egorov argued in an interview with local publication RBC on Monday.

However, crypto transactions are still traceable and need to be reported, the official said, adding that FNS is ready to use automated tracking systems to process large amounts of data.

“When you step into digital space, you still leave a trace somewhere. And it is a matter of time before this trace is identified, ”said Egorov.

The official also noted that FNS is currently developing ways to deal with crypto tax evasion as authorities seek to restrict such activity rather than just identify it. Egorov added, “We wanted to find solutions that would prevent a problem as a phenomenon, rather than just dictating the actions of a specific player.

The Russian State Duma passed a draft law on the taxation of cryptocurrencies in first reading in February 2021, which obliges citizens to report crypto transactions totaling more than $ 7,800 per year.

To continue the second reading, the legislature decided in mid-October to set up a competent committee, the State Duma budget and tax committee.

According to Sergei Khitrov, founder of the Russian crypto event Blockchain Life, Russian crypto companies can generate taxes worth $ 4 billion every year. According to him, the local crypto community has so far shown a “total failure” in understanding how to pay taxes on cryptocurrencies.

Related: The property hands over a 1 ton infrastructure bill with crypto tax to get approval from Biden

The news comes as U.S. lawmakers battled changes to tax reporting requirements for crypto transactions over $ 10,000 in a newly passed infrastructure bill. The bill was originally approved by the Senate in August and hit with a compromise amendment proposal by a group of six Senators, including Pro-Bitcoin (BTC) Senator Cynthia Lummis