Russia has recently approved an amendment to a draft bill introducing taxes on crypto transactions and mining activities. The legislation will classify cryptocurrencies as property for tax purposes, meaning that income generated from Bitcoin mining and trading will be subject to taxation. However, crypto transactions will be exempt from value-added tax, falling under the same tax bracket as personal income from securities, typically taxed at no more than 15%. Mining taxes will be based on the market value of assets at the time they are received, allowing miners to deduct expenses from their taxable income. Mining infrastructure operators will also be required to submit regular reports on crypto miners using their services.
The Russian Ministry of Finance has stated that taxing mining income ensures a fair representation of these activities, balancing the state’s interests and those of businesses. This move is part of Russia’s ongoing effort to regulate the crypto industry, following steps taken to control crypto mining’s energy consumption and better regulate the sector. The amendment comes after the introduction of a crypto taxation bill in December 2020 and the proposal to tax miners’ unrealized gains last month. In addition to the new taxes, the government has imposed an energy usage limit for Bitcoin miners, restricting unregistered individuals to 6,000 kilowatt-hours of power. There are also plans to limit crypto mining in certain regions due to ongoing energy shortages.
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In conclusion, Russia’s approval of taxes on crypto transactions and mining activities marks a significant step in the country’s efforts to regulate the crypto industry. The new legislation classifying cryptocurrencies as property for tax purposes will subject income from mining and trading to taxation, while exempting crypto transactions from value-added tax. With the government aiming to balance its interests with those of businesses, the amendment also includes measures such as allowing miners to deduct expenses from taxable income and requiring infrastructure operators to report on miners. These moves, coupled with previous regulations on energy consumption and sector oversight, highlight Russia’s commitment to regulating the rapidly growing crypto industry.
