Republic of Belarus: taxation of transactions with cryptocurrency and tokens

Mining of cryptocurrency and purchasing an apartment: is it a threat to be inquired or punished by tax authority?

Many residents of Belarus actively use the Forex market, monetize videoblogs, as well as confidently master operations with cryptocurrencies.

Specialists from the Ministry of Taxes and Assessments gave answers to a number of questions about taxation of such methods of making a profit specifically for readers of tyt.by.

Reader (R): If a person made a purchase of bitcoin in 2010 for 10 USD and sold after 7 years for 17 thousand, is it necessary to file a tax return?

MTA: To date, there are no laws or acts on tax exemptions from alienation of tokens and cryptocurrencies, meaning that the income of individuals acquired after completion of above transactions is taxed. The foregoing means that you must file a declaration before 01.03, and make a payment no later than on 15.05.

It should be noted that the eighth Decree regulating the development of digital economy comes into force on 28.03 of this year, and this document provides for introduction of certain tax incentives for transactions with tokens. For example, individuals will not need to pay tax for mining operations, purchase or transfer of tokens to another owner for BYR, monetary units of other countries, electronic money until January 2023. The same applies to the exchange of digital currency. This rule extends to actions taken before the entry into force of the Decree.

R: I want to go mining of cryptocurrencies. As I understand, under Decree No 8, I do not need to pay an income tax. Let’s suppose I would manage to mine and exchange cryptocurrency for currency of a country, and I want to buy something by making payment through it. Do I need to fill in a declaration? Can tax authority check whether I have a farm for mining and an electronic wallet? The decree exempts from paying taxes, which means that I will not need to provide a declaration of profit obtained from mining of cryptocurrencies.

MTA: If we talk about purchase of expensive items, then according to the norms of current legislation, tax authorities monitor the compliance of income and expenditure of natural persons. This is verified by taking into account the data on profits and property, indicated by an individual in a declaration filed with tax authorities. If tax authority has established in the process of control that natural person's expenses are higher than income, then this person must provide information on the source of profit. The amount and date (period) of receiving profit and other information about the source of revenues, if available, should be also specified.

If there is such a kind of earnings, will it be necessary to register individual entrepreneurship?

The Civil Code of Belarus (Article 1) refers to entrepreneurship activities as to independent activity of a legal entity and an individual that carries it out on own behalf in civil commerce with all the risks and civil liability, that is aimed at generating income from producing, processing or acquisition of things/items and their subsequent sale. The foregoing also includes works or provision of services, if intended for selling by other people and will not be used for own needs.