The recent approval of a bill by the Russian government has brought about significant changes in the taxation of cryptocurrency transactions in the country. The bill, prepared by the Ministry of Finance, now classifies crypto property as taxable, with companies required to pay income tax on such transactions, while individuals will be subject to personal income tax.
Starting next year, Russian citizens will face varying tax rates ranging from 13% to 22% based on their income levels. However, it is important to note that crypto transactions will not be subject to value-added tax. Individuals and legal entities engaging in crypto transactions must report their activities to the Federal Tax Service if their receipts and write-offs exceed 600,000 rubles per year.
Furthermore, operators of crypto mining infrastructure will be obligated to provide data on the services they offer to the tax service. Failure to do so may result in fines of up to 40,000 rubles. The bill, which was initially drafted in December 2020 but faced delays, gained momentum following the legalization of crypto mining in Russia on November 1, 2024.
In terms of tax payment for mining profits, miners will be required to make an advance payment upon receiving cryptocurrency in their wallets, with an additional tax applied when the digital assets are sold. The tax rate for the sale of cryptocurrencies is proposed to be 13% in 2025, increasing to 15% for individuals with annual incomes exceeding 2.4 million rubles.
The bill also aligns with the North American approach to cryptocurrency taxation, where taxes are levied based on the receipt of crypto in wallets minus documented expenses. Unlike Russia, the U.S. taxation system considers the duration of cryptocurrency holdings, with short-term holdings taxed at rates between 10% and 37%, and long-term holdings subject to lower rates of 0%, 15%, or 20%.
Overall, the new tax regulations in Russia reflect a growing trend towards the formalization and regulation of cryptocurrency transactions globally. By integrating these changes into the tax system, the Russian government aims to ensure compliance and transparency in the burgeoning crypto market while also generating revenue for the country’s coffers.