Russia plans to impose a 15% tax on cryptocurrency transactions and mining income

To regulate the rapidly expanding Cryptocurrency field, the Russian Ministry of Finance has proposed a draft amendment that suggests levying a 15% personal income tax on profits generated from Cryptocurrency trading and Mining businesses. This legislative proposal aims to classify Cryptocurrency as taxable property, thereby canceling value-added tax (VAT) on Cryptocurrency transactions.

The main contents of the proposed amendment include:

• Tax classification: Cryptocurrency will be officially designated as a taxable asset. - Tax rate: It is recommended to impose a maximum 15% personal income tax on cryptocurrency gains. - Mining income tax: Income obtained from mining activities will be taxed based on the market value of the tokens received. - Deductible expenses: Miners will be allowed to deduct operating expenses from their income to ensure fair tax calculation. - VAT exemption: Transactions involving digital currencies will be exempt from value-added tax (VAT). - Reporting obligation: Operators of mining infrastructure will be required to report individual information of those using their facilities for mining to tax authorities.

This proposal represents an important progress for Russia in establishing a regulatory framework for Cryptocurrency, aiming to provide clear and structured norms for this rapidly developing market. The government has been working on this legislation since December 2020, and the bill successfully passed its first reading in 2021. The new regulations also include specific requirements for Mining infrastructure operators, such as the registration with the Federal Tax Service and exemption for individuals with monthly power consumption below 6,000 kilowatt-hours.

In addition, the Russian government has outlined plans to impose temporary mining bans on certain areas due to power shortages. The ban will be effective from December 1, 2024 to March 15, 2025. These tax measures are expected to generate approximately 50 billion rubles (about $521 million) in annual revenue for the budget.

〈Russia plans to impose a 15% tax on cryptocurrency transactions and mining income〉This article was first published in Block Client.