Chatting with Legal Advisor Milena Yelts about the New Tax Law
Income, not Transfers, is the Basis for Milena Yelets' Tax Obligations
Starting from June 1st, a fresh tax law focusing on countering money laundering has been implemented. During the talk, Milena discussed whether card-to-card transfers will now be taxed, explained what qualifies as income, and offered tips for citizens to avoid financial loss due to this new law.
Insights:
- Cross-border money transfers are impacted differently in various countries. The US proposes a tax on international remittances, yet domestic card-to-card transfers remain unaffected (US perspectives)[1][3]. Meanwhile, Russia enforces tighter controls on virtual cards, aiming to combat money laundering without penalizing ordinary citizens[2].
- Income is generally defined as payments received for goods, services, or property sales. Taxation mainly applies to income-producing transactions, while standard card-to-card transfers between individuals (e.g., family or friends) remain tax-exempt[2]. However, transactions that exceed certain thresholds or are part of business transactions may trigger reporting or tax obligations[4].
- Practical advice for ordinary citizens includes staying informed about new laws affecting money transfers, documenting large or business-related transactions, avoiding suspicious activities, monitoring account activity, and knowing their rights if a transaction is unjustly blocked[2].
Breakdown:
- Card-to-card transfers: While there might be changes in the taxation of remittances, card-to-card transfers for personal use should remain unaffected as long as they are not considered business transactions[2].
- Income definition: Payments for goods, services, or property sales are usually considered income, not non-commercial transfers like gifts or loans between individuals[2].
- Regulation insights: Most ordinary citizens won't face issues if they stick to personal transfers. Keep up with the latest developments in your country, and use trustworthy financial institutions for larger or frequent transfers[2].
- Precautions: Maintain records of large transfers, avoid suspicious activities, regularly review account statements, get familiar with your rights, and keep transactions below the reporting threshold when possible[2].
Handy Reference:
| Topic | International/US Context | Citizen's Tips ||--------------------------|-----------------------------------|-------------------------------------|| Card-to-card transfers | Some impact on remittances | Use reputable services, document transfers || Income definition | Payment for goods/services | Understand the purpose of transfers || New AML controls | Increased reporting, virtual card restrictions | Avoid questionable activities, monitor accounts, know your rights |
Ordinary citizens should be aware of the new laws and regulations regarding money transfers to avoid any unforeseen complications[2][3][5].
Ordinary citizens should be aware that personal card-to-card transfers may remain tax-exempt, provided they are not part of business transactions, following the discussions on the new tax law. It's crucial for citizens to understand that income is typically defined as payments received for goods, services, or property sales, and not non-commercial transfers like gifts or loans between individuals.
