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Do You Need to Declare Cryptocurrency Income?

2025-02-23 13:00
If you’re not just holding Bitcoin in a cold wallet but actively using cryptocurrencies, chances are you’ll need to report your income to the tax authorities. Here’s a list of income types that must be declared:
  • P2P trading – if you regularly sell cryptocurrency to private individuals.
  • Exchange trading – speculative transactions, long-term investments, margin trading.
  • Arbitrage – earning profits from price differences.
  • Mining – if the mined cryptocurrency is later sold or used to generate income.
  • Interest income – staking, lending, dividends.
  • Investment income – buying cryptocurrency and later selling it at a higher price.
  • Crypto gifts – if received from non-close relatives, they are taxable.
Why declare crypto income?
Complying with tax obligations helps avoid issues when:
  • Opening a bank account – banks may request proof of income sources.
  • Making large purchases – property, vehicles, investments require financial transparency.
  • Withdrawing funds – questions may arise about the origin of funds.
  • Making international transfers – the tax authorities may take an interest.
  • General compliance – voluntary declaration reduces the risk of audits and penalties.
  • Remember, declaring crypto income isn’t optional — it’s a legal obligation.
How should individuals declare crypto income?
  • You must submit the 3-NDFL tax return for 2024 by April 30, 2025.
Who must file the tax return?
  • Russian tax residents – must report worldwide income.
  • Non-residents – report only income from Russian sources.
Declaring mining income:
  • Income is subject to personal income tax (NDFL) at a rate of 13–22%.
  • The tax base for mining income can be reduced by documented expenses related to mining.
  • Income from mining in Russia is considered income from Russian sources.
  • The value of cryptocurrency mined before 01.01.2025 is equal to the miner's expenses incurred.
Taxation specifics for cryptocurrency sales:
Your taxable income from selling crypto can be reduced by:
  • Expenses related to its acquisition;
  • The amount of income in kind that was already taxed (e.g., mined crypto);
  • The amount of material benefit already taxed (e.g., crypto bought below market price).
Income is taxed at 13–15% (for amounts exceeding 2.4 million rubles).
If you bought crypto from a related party below market value, you are considered to have received material benefit, which is also taxed at 13–15%.
Some fear that declaring income might trigger audits of the past 3 years, but in most cases, fines for previous years can be reduced. Not declaring at all only increases your risk.
Important restriction: Cryptocurrency cannot be used as payment in Russia
Russian tax residents are not allowed to accept crypto as payment for goods or services.
💀 Risks: If you receive crypto as payment for services or as a salary, this may violate the law. Additionally, when declaring such income, you could be taxed twice — first upon receipt, and again when converting the crypto into fiat.
Penalties for failing to declare income:
  • Late filing penalty – 5% of the tax owed (max 30%, min 1,000 RUB).
  • Failure to pay NDFL – 20% penalty (40% in cases of intentional evasion).
  • Interest – accrued daily for late payments.
  • Criminal liability – possible for large-scale tax evasion, but may be waived upon voluntary repayment.
💡 Bottom line:
If you have cryptocurrency income, it's crucial to properly record and declare it. This is not just a legal requirement — it also helps you avoid problems with banks and tax authorities.