Bill Introduced to Impose 15% Tax on Crypto Revenues in Russia
The Russian government has approved new amendments regarding the taxation of income generated from cryptocurrency transactions and mining activities. According to a report based on the Russian Ministry of Finance, under these regulations, cryptocurrency revenues will be classified as property, and the maximum tax rate will be 15%. Income from mining activities will be taxed based on the market value at the time of acquisition. Additionally, expenses related to mining operations may be deductible.
The proposed legislation aims to exempt cryptocurrency transactions from value-added tax (VAT). Trade revenues will be taxed at a rate of 15%, similar to securities transactions. Mining infrastructure operators will be required to report the information of their service recipients to the government. This regulation is stated to aim at balancing relationships between businesses and the government. The draft legislation, first introduced in December 2020, was reportedly approved in its first session in 2021.
The Russian government has approved the law containing regulations on cryptocurrency transaction taxation. Revenues from cryptocurrency trading will increase by up to 15%. The Ministry of Finance announced that cryptocurrencies will be recognized as properties for taxation purposes. The government aims to promote the use of cryptocurrencies by exempting them from value-added tax. The Ministry of Finance also included rules on the taxation of mining revenues and expenses in the amended draft legislation. According to the new rules, the buying and selling of mined digital currencies and the taxation controls of mining infrastructure operators will fall under these regulations.
Under the new tax law, cryptocurrency mining infrastructure operators will be required to report all service provision data to the Federal Tax Service (FTS). Any reporting failures or non-compliance with deadlines will result in a penalty of 40,000 rubles (approximately 417 dollars). The FTS will use this data to ensure compliance with the new tax laws. The Ministry of Finance stated that discussions held with sectoral interests have resulted in a solution that balances industry and government interests. This approach aims to promote innovation and growth in the cryptocurrency sector.
Individual entrepreneurs and institutions will only be able to mine digital currencies after officially registering in the special registry of the Federal Tax Service. However, individuals without special registry status as individual entrepreneurs will be able to engage in cryptocurrency mining as long as they do not exceed a monthly energy consumption limit of 6,000 kWh.