Russian State Duma adopts law on CFA taxation
The State Duma adopted on third reading a law defining the taxation rules for the issue, sale and exchange of digital financial assets (DFA) and utility digital rights on Russian blockchain platforms. The respective document was submitted by the government to the State Duma in mid-April.
The DFA turnover will be subject to VAT on the full sale price. The issuers’ income generated through issuing the DFAs is subject to corporate income tax at the time of issuance, not upon redemption, when the real financial result becomes clear. This makes projects that involve issuing such digital rights to raise funding economically unsound. The income of individuals from the sale of DFAs will be taxed without the possibility of reducing their acquisition costs.
According to the law, the issue of DFA and the services of operators of information systems and investment platforms will be exempt from VAT. However, advisory services provided by the operators, as well as services for granting rights to use computer programs, will not be exempt from VAT.
The DFA that certify the right to participate in the capital of a non-public joint-stock company, will be subject to the taxation rules and procedures applicable to the shares of such a company.
Russian legal entities owning DFAs will pay 13% on the income received from them, while non-resident companies will be charged at a 15% rate.
Every time, no later than February 1, the DFA issuer will have to submit to the regulator all information on all transactions with the DFA and each individual who was a party to transactions with the DFA and a user of such an information system. Now the register of operators of DFA issue information systems includes the Atomyze blockchain platform, the Sberbank platform and the Lighthouse fintech company, together with Transmashholding.