Jai Sahu
Russia’s new crypto taxation law classifies digital currencies as property, exempts mining from VAT, and mandates detailed reporting, signaling a seismic shift in regulation.
New Crypto Tax Law Marks a Shift in Russia’s Regulatory Approach
On Wednesday, Russia’s Federation Council, the upper house of parliament, approved a government-backed bill that outlines a comprehensive crypto taxation framework for digital currencies. The bill was first passed in the State Duma, the lower legislative chamber, the day before.
The approval of this legislation marks a significant step in formalizing Russia’s stance on cryptocurrency regulation, which is crucial as the global crypto landscape continues to evolve.
Key Provisions of the New Law
The new law classifies digital currencies, including those used as payment instruments in experimental legal regimes, as property within Russia’s Internal Revenue Code. This classification effectively removes value-added tax (VAT) from cryptocurrency mining and sales transactions, easing financial burdens on industry participants. Additionally, services provided by authorized organizations facilitating transactions in experimental regimes will also be VAT-exempt.
One of the law’s key provisions mandates mining infrastructure operators to report data on individuals using their systems to tax authorities. This move is aimed at improving transparency and regulatory oversight.
Revenue generated from digital currency mining will be recognized as taxable income, forming the basis for personal income tax. For businesses engaged in mining activities, the standard corporate income tax rate will apply, as clarified by Danil Volkov, head of the Russian Finance Ministry’s department.
Legislative Process and Future Steps
For the bill to become law, it must pass through several stages. After approval from the Federation Council, it is expected to receive President Vladimir Putin’s signature, officially establishing a legal framework for digital currency taxation in Russia.
This legislation is part of a broader effort by Russia to regulate its cryptocurrency market amid growing international scrutiny. The framework aims to strike a balance between fostering growth in the crypto sector and ensuring tax compliance, which will benefit Russia’s national economy.
Taxation on Crypto Earnings and Future Plans
The law specifies that mining revenue will be taxed based on the value of digital assets on international exchanges. For individuals earning from digital currencies, the personal income tax rate will remain at 13%. However, starting in 2025, the rate will increase to 15% for annual incomes exceeding 2.4 million rubles.
These tax measures reflect Russia’s broader economic strategy to promote a controlled expansion of the cryptocurrency market while aligning with international standards. The government hopes these steps will enhance transparency, clarify legal standing for businesses and individuals, and contribute to national revenue streams.
The approval of this crypto tax law in Russia underscores the country’s commitment to regulating the growing digital currency sector, setting the stage for clearer tax obligations and greater industry transparency in the coming years.