How to legalize income from Cryptocurrency

How to legalize income from Cryptocurrency

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The fall of the ruble, the collapse of the stock market and restrictions on foreign exchange transactions are forcing us to look for new approaches to asset management. Cryptocurrency, a digital currency, could be a solution both for those who interact with foreign counterparties and those who simply want to diversify risks.

Nikita Kutsenko, founder of the FINOMEN Investment School, told how you can legally use Cryptocurrency today.

Content:

Nikita Kutsenko, Expert
Cryptocurrency as a monetary unit has not suffered from the imposed sanctions, the confidence of holders has not been undermined. Unlike more “stable” assets, Cryptocurrencies showed a completely calm reaction to all the sanctions. For example, since the beginning of the restrictions, Bitcoin has grown by 30%.

Mining (Cryptocurrency Mining) as a whole did not suffer in any way and even came to a more positive position. The weakening of the ruble makes some of the electricity costs cheaper.

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The sanctions had a negative impact on something else – namely on the attitude of Russian users to centralized trading platforms. Cryptocurrency exchanges veiledly say that they can block absolutely any user. For this reason, many traders have left centralized platforms and settled on decentralized crypto exchanges.

In terms of such indicator as BTC reserves, we have seen a downward trend, which indicates the pressure of buyers, as there are fewer and fewer assets left to sell on the exchange. At the same time, the number of cryptocurrency names is not shrinking – there are simply fewer coins available to trade. The trend shows a change in scarcity status.

The conclusion from this is that more users do not want to sell their assets, indicating a growing scarcity and a positive global trend.

There is no way to withdraw Bitcoins to a bank card. First, you need to exchange Cryptocurrency for fiat, that is, “real” money: rubles, dollars, euros, and so on. Then already currency can be transferred to a bank card or a wallet.

There are several ways to withdraw Cryptocurrency:

It is still possible to exchange cryptocurrency for money through Cryptocurrency ATMs and bank card exchanges, but they can take a high commission and there is a big chance of getting caught by fraudsters.

To legalize income related to Cryptocurrencies, you have to pay tax. Now the basic tax rate for individuals is 13%, for legal entities – 20%. The final amount is calculated based on the difference between the value of the asset at the time of purchase and sale.

To pay tax, you need to fill out a tax return on a 3-NDFL form – this must be done by April 30 for the previous year. To do this, download reports from exchanges, p2p-platforms, exchanges and bank accounts, from which Cryptocurrency was purchased.
It is possible to submit a declaration:

In it, you need to reflect the income from the sale of the Cryptocurrency, subtract from this amount the cost of buying this asset (even if it was purchased more than a year ago) and multiply the difference by the rate of personal income tax 13%.

At the moment in the Russian Federation there is a law “On digital financial assets,” which came into force on January 1, 2021. The document equates Cryptocurrencies to property and introduces a ban on their use as a means of payment.

Since the beginning of 2022, Russian authorities have been actively discussing regulatory options for Cryptocurrencies. In late January, the Central Bank proposed to ban the issue, circulation and exchange of Cryptocurrencies, as well as the organization of these operations. However, Deputy Prime Minister Dmitry Chernyshenko approved a roadmap that proposes to regulate Cryptocurrencies rather than ban them.

If transactions for the purchase and sale of Cryptocurrencies are carried out systematically and bring profit – it is considered a business activity. In this case, it is necessary to register as a self-employed or individual entrepreneur to legitimize their income.

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Written by Renat
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