Russian President Vladimir Putin has recently signed a new federal bill that brings significant changes to the cryptocurrency landscape in Russia. The legislation introduces taxes on cryptocurrency transactions and officially recognizes cryptocurrencies as property.
Under the new law, individuals engaging in cryptocurrency transactions will be subject to a personal income tax ranging from 13% to 15%. However, mining operations will be exempt from value-added tax. Mining infrastructure operators will also be required to report details of their services to local authorities, with penalties of up to 40,000 rubles for non-compliance.
One of the key aspects of the bill is the classification of digital currencies as property, giving them legal recognition in Russia. Cryptocurrency obtained through mining will be treated as income in kind, with its value determined based on market rates. This income will be taxed according to a progressive scale, with rates of 13% for income up to 2.4 million rubles and 15% for income exceeding this threshold. Mining-related expenses will also qualify for tax deductions.
Corporate profits from cryptocurrency mining will be subject to the standard corporate tax rate, which is set to increase to 25% starting in 2025. The law also imposes restrictions on tax regimes for organizations and individual entrepreneurs involved in mining or cryptocurrency sales, prohibiting them from opting for simplified or specialized taxation systems.
In a separate development, President Putin signed legislation in August 2024 legalizing cryptocurrency mining in Russia. The law, effective from November 1, 2024, allows only registered Russian legal entities and individual entrepreneurs to participate in mining activities. Individual entrepreneurs with entrepreneur status have the opportunity to mine Bitcoin with a consumption limit of 6,000 Kw/h per month, with some regions facing temporary restrictions due to energy consumption concerns.
The increased regulatory clarity in Russia is contributing to a growing demand for cryptocurrencies in the country. In November, traffic towards major crypto exchanges in Russia surged by over 8%, reflecting the growing interest and adoption of digital assets in the region.
Overall, these new regulations signal a significant step towards the formal recognition and regulation of cryptocurrencies in Russia, setting the stage for further developments in the crypto space in the country.