Obligation to Submit a Tax Return for Capital Gains from the Transfer of Digital Assets

If an individual, as an issuer of virtual currency, transfers digital assets for consideration, the income obtained as the positive difference between the selling and acquisition price is subject to taxation under the personal income tax as a capital gain. These rules apply both to the sale of digital assets for money and to other forms of transfer for consideration.

The transfer of digital assets also includes the exchange of one virtual currency for another, or any other type of exchange that may result in income. In such cases, the income realized as the difference between the selling and acquisition price (expressed in the equivalent legal tender) is also subject to taxation as a capital gain. It is important to note that the market value of the digital asset at the time of transfer is used for the calculation.

A taxpayer who realizes a capital gain or loss from the transfer of digital assets during the year is required to submit a tax return no later than 120 days after the end of the quarter in which the income was earned. This ensures timely tax calculation and helps avoid potential penalties or interest.

The tax return for determining capital gains is submitted on Form PPDG-3R, either electronically via the Tax Administration portal or in paper form. It is recommended to keep all documents and records of purchase, sale, or exchange of digital assets so that the taxpayer can accurately determine the income earned and facilitate any potential audit by the tax authorities.