Russia has taken a significant step towards regulating the growing cryptocurrency sector by approving sweeping amendments to the nation’s Tax Code. The legislation, adopted on Nov. 27, formalizes the taxation framework for digital currencies like Bitcoin (BTC) and aims to ensure compliance with tax laws.
The new law, titled “On Amendments to Parts One and Two of the Tax Code of the Russian Federation and Certain Legislative Acts of the Russian Federation,” was introduced by Alexander Shenderiuk-Zhidkov, Deputy Chairman of the Federation Council’s Committee on Budget and Financial Markets. These comprehensive tax laws define digital currency as property for tax purposes, providing legal clarity that aligns with Russia’s broader regulatory goals.
Under the updated Tax Code, income derived from crypto transactions will be taxed under a progressive personal income tax system. Earnings up to a specified threshold will incur a tax rate of 13%, while higher income brackets will face a 15% rate. This structure aims to balance government revenue generation with fairness for individuals and businesses involved in digital asset trading.
Mining operators are required to report detailed information about their activities to local tax authorities to enhance transparency and address potential regulatory loopholes in the mining sector. This includes disclosures about mining activities conducted on behalf of clients and aims to combat tax evasion within the sector.
Certain crypto activities, such as transactions related to the mining and sale of digital currencies, are exempt from value-added tax (VAT), providing an incentive for miners and crypto enterprises operating in Russia. The government has also introduced measures to restrict crypto mining in energy-deficient regions to prevent strain on the country’s power grid.
The new tax framework is estimated to generate up to 200 billion rubles (approximately $2 billion) annually in state revenue, supporting the digital economy while bolstering public finances. Critics have raised concerns about potential enforcement challenges, particularly in monitoring decentralized financial activities. However, proponents argue that the law strikes a necessary balance between fostering innovation and maintaining fiscal responsibility.
These amendments are part of a broader strategy to integrate digital currencies into Russia’s financial system while addressing risks associated with unregulated markets. The legislation signifies a significant step towards regulating the cryptocurrency sector in Russia and ensuring compliance with tax laws.