Russian Banks Uncover Loopholes that Could Help Tax Crypto

As a result, managing to counter what most states are hesitant to do, particularly Russia. These states do not want to define cryptocurrency as money in any of their legal documents, however, the creative method will still be able to tax token holders.

Tokens are Treasure or Property

By classifying Bitcoins, altcoins and other digital assets as ‘treasure’ or ‘property’ rather than money; would give courts the ability to subject them to taxation. Let’s take this instance of crypto mining, where a miner successfully mines BTC 1; to be comparable to an explorer digging up a trove to uncover buried gold treasure.

Hence, mining the bitcoin could be similar to finding a token (discovery). An association that easily points out crypto holders to be subject to state taxation.

Tokens are Newly Created Goods

However, one hurdle to this theorization is the fact that mined tokens are not subject to discovery and are never found as such. Rather, digital tokens and coins come about as a result of human activity. Nevertheless, the Association of Banks came up with a legal response. Since the taxation code in the country states that newly created goods are subject to taxation value, similar to vegetables or fruits grown on a farm; hence are taxable. Hence countering an argument that tokens are not similar to treasure.

Additionally, the association states that another better way is to consider digital tokens as items of value, however in nonmonetary barter transactions. A fact that again makes them subject to the taxman.

Earlier on, Russia announced plans to do away with cryptocurrency anonymity. A plan that several exchange operators noted as feasible.