TAX REGULATION OF VIRTUAL CURRENCIES IN FOREIGN COUNTRIES AND RUSSIA

Abstract

The paper explores tax regulation of virtual currencies as a new class of digital assets. The relevance of the topic is due to the wide development in the world of virtual currencies operations in the absence of a unified the interpretation of virtual currencies and in the absence generally accepted of the regulation of digital assets both in the monetary and taxation spheres. The research is aiming to identify the economic and legal interpretations of virtual currency and determine taxation of virtual currencies in foreign countries and drafting recommendations on taxation of virtual currencies transactions in Russia. For the first time in the Russian scientific literature based on the study of tax regulation of virtual currencies in Singapore, UK, USA, Japan and Germany defined interpretations of virtual currencies and disclosed their tax consequences. It is concluded that in the analyzed countries the interpretations of virtual currencies differ not only at the national level, but also at the level of regulatory authorities. For the first time concluded no correlation between taxation of virtual currencies and approaches to monetary policies. In most countries virtual currencies-related incomes are taxable by corporate taxes and the burden of taxation is defined by domestic corporate taxation approach; there is less variety in approaches to taxation of virtual currencies-related incomes, while in Singapore these incomes are exempted from personal taxation. There is also no correlation between definitions of virtual currencies and exemption from VAT or sales tax. In Russia, implementation of best global practices shall be complemented by considerations of domestic direct and indirect taxation specifics. The paper suggests that virtual currencies related incomes are subject to corporate income tax but exempted from personal income tax. Virtual currencies-related transactions should be exempted from VAT but without necessarily recognizing virtual currencies as official mean of payment.

Keywords:

virtual currencies, cryptocurrencies, crypto-assets, digital financial assets, tax regulation, virtual currency taxation, cryptocurrency taxation, crypto-assets taxation