In a major step towards successfully regulating digital assets in the country, Russian President Vladimir Putin has signed a new law Legal framework To tax Bitcoin mining and transactions, recognizing them as property and paving the way for formal taxation.
New Bitcoin and Cryptocurrency Tax Law in Russia
According to local media ReportsCryptocurrencies, including Bitcoin, will be classified as property under the new law. This classification extends to currencies used in foreign trade settlements within the framework of the experimental legal regime (EPR) in digital innovation.
Notably, the law stipulates that the mining and sale of digital currencies is exempt from value-added tax (VAT), which may stimulate more investment and participation in the cryptocurrency market.
One of the key provisions of the law requires mining infrastructure operators to submit reports to tax authorities regarding users of their services Cryptocurrency version. Failure to provide this information immediately could result in a fine of 40,000 rubles ($380).
With regard to income tax implications, cryptocurrencies obtained through mining will be classified as “income in kind,” a term commonly used to describe Non-cash payments It is made in the form of goods or services.
The value of the extracted cryptocurrency will be determined based on prevailing market prices. This income will be subject to a progressive tax scale, allowing deductions related to mining expenses.
Tax rate of 25% starting in 2025
The law also establishes a two-tier tax regime for income generated from the acquisition, sale, or other forms of cryptocurrency trading.
Income up to 2.4 million rubles ($22,600) will be taxed at a 13% rate, while any income above this limit will be subject to a 15% tax. These profits will be included in the same Tax base Such as income from securities, bank deposits, and other financial sources.
For companies involved in Bitcoin mining, a standard income tax rate of 25% will apply starting in 2025. However, the legislation limits the tax regimes available to organizations and individual entrepreneurs (IPs) involved in cryptocurrency activities.
Specifically, these entities will not be permitted to adopt a single agricultural tax, use a simplified tax system, or benefit from a “simplified automated tax system.” The patent system and the self-employed system will also not apply to Bitcoin mining and Transactions.
The law is scheduled to enter into force upon official publication, with some provisions subject to different timelines. Transitional provisions have also been included to facilitate the implementation of these regulations.
At the time of writing, the leading cryptocurrency is trading at $98,500 after a brief 7% correction earlier this week, approaching its all-time high of $99,500.
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