On July 22, 2020, the State Duma finally adopted the law on digital financial assets and digital currency, which will come into force on January 1 next year. In general, the law is aimed at regulated information systems based on the blockchain, describes the ability of enterprises and financial organizations to issue digital financial assets (DFA) and digital currency (DV) and regulates their circulation. With the entry into force of the law, some financial market players will be able to create new financial products, while others will have the opportunity to expand their investment portfolio.
What is CFA and their advantages
The law introduces a concept that is new to our legal system: a digital financial asset. In fact, CFA is digital rights that can apply to monetary claims (for example, under a loan agreement), equity securities (shares, bonds, issuer's options, Russian depository receipts), as well as participation in JSCs (excluding PJSCs). According to the law, CFA is an object of civil rights, which means that it can also act as a subject of transactions. This opens up the possibility of concluding sales and purchase agreements, exchange and other transactions with CFA. Any transaction not prohibited by the Civil Code of the Russian Federation can be concluded with respect to such an asset.
The advantages of introducing DFA are obvious: the main one is that all operations with them can be carried out remotely. For example, it will be possible to quickly transfer ownership of a share in a non-public joint stock company. In addition to increasing the speed of operations, the cost of document circulation will also decrease. In general, the legalization of digital financial assets opens up new opportunities for attracting foreign investment to the Russian economy.
As in the case of “analog” financial assets, there are legal nuances and rules in working with CFA that cannot be deviated from.
Legal nuances
The main difference between transactions with digital financial assets from ordinary ones will be the need to conclude them only through the DFA exchange operator, which at the same time will be able to act in such transactions as one of the parties (acting in the interests of another person). Credit institutions, trade organizers and other companies will be entitled to become operators. An important condition is that they must be included by the Central Bank of the Russian Federation in the register of exchange operators of the CFA, and their authorized capital must be at least 50 million rubles. In addition, the law imposes certain qualification requirements for the head and officials of such organizations.
Any transaction related to digital financial assets will completely go into electronic format. For example, when concluding a share purchase and sale agreement, the process will consist of two legally significant actions:
1) placing an offer (the seller's offer to conclude a deal);
2) the acceptance of the offer (acceptance of the offer by the buyer, that is, the conclusion of the transaction).
In this case, the essential terms of the agreement will be the price, name and number of shares, as well as the registration number (digital code that identifies a specific issue of securities). If the contract will be concluded with payment by installments, then it is necessary to provide for the procedure, timing and amount of payments.
Taxation of CFA
Operations with CFA for organizations will be subject to income tax and VAT (in the first case, the rate will be 13%, in the second - 20%), and for individuals - personal income tax (13%). However, there is an exception - transactions for the alienation of digital financial assets, which express the right to shares in the authorized capital of a JSC, as well as to equity securities and derivative financial instruments. When carrying out these operations, legal entities and individuals should be relieved of the need to pay taxes.
Digital currency
The new law also officially introduces the concept of digital currency - a collection of electronic data (digital code or designation) in an information system. In fact, CV is equated with cryptocurrency, although the law does not directly mention this. As of 2020, only a quarter of all countries in the world have officially legalized cryptocurrency - the list includes the countries of the European Union, North and South America, Australia. In Germany, for example, she is encouraged to pay for goods or services - such transactions are completely tax-exempt.
Under the new regulation, the cryptocurrency in Russia will be able to be the subject of transactions from January 1, 2021. It will be possible to buy, sell, issue, exchange and perform other investment operations with it. At the same time, CV is still not recognized as a monetary unit - it will be prohibited to pay for goods or services with it. The taboo affects domestic organizations, divisions of foreign companies in Russia and Russian tax residents - individuals (those who spend more than 183 days a year in the Russian Federation). Also, according to the law in our country, the dissemination of information (advertising) about the offer or acceptance of digital currency as a means for making payments is not allowed.
As in the case of CFA, transactions with CVs will be subject to taxation: income tax for organizations and personal income tax for individuals (all at a rate of 13%). The law does not yet mention administrative and criminal liability for illegal operations with cryptocurrency - most likely, these points will appear in new versions of the document.
In general, it can be noted that the topic of transactions with CFA and CV is completely new for our country, and Russian regulations related to such transactions are still being developed. Since the legislation in relation to them has not yet been fully formed, organizations and individuals have great chances to face many legal difficulties and pitfalls when concluding and executing such transactions. Therefore, to minimize all risks, it is best to seek the advice of a professional lawyer with relevant experience.