Russia‘s Federation Council has approved a bill that imposes taxation on cryptocurrency transactions and mining. The new regulation exempts cryptocurrency transactions from value-added tax (VAT). Only President Vladimir Putin‘s signature is now awaited for the bill to become law.
VAT Exemption for Cryptocurrency Transactions
According to the Federation Council’s announcement, the bill was approved on Wednesday. The lower house, the State Duma, had accepted the regulation a day earlier. The legislation, prepared by the Russian government, defines cryptocurrencies as a type of property.
Under the new regulation, cryptocurrency transactions will be exempt from VAT. However, income derived from cryptocurrency trading will be taxed at the same rate as capital gains. This rate can reach up to 15% for personal income tax. Additionally, income from mining activities will be taxed based on the market value at the time of acquisition.
The bill imposes significant responsibilities on mining infrastructure operators. Accordingly, operators will be required to report their clients’ information to tax authorities. This will ensure that cryptocurrency mining activities are monitored more transparently.
Mining Activities Under Strict Control
Russia continues to strengthen its regulations concerning cryptocurrencies. Earlier this month, the country limited the monthly electricity consumption of unregistered individuals. Under the new rules, individuals are allowed to use a maximum of 6,000 kilowatt-hours of energy per month for Bitcoin (BTC) 
$62,960 mining.
Cryptocurrency mining in Russia is known to be an energy-intensive sector. Therefore, regulating mining activities is considered an important step for both conserving energy resources and increasing tax revenues.
As the bill has been approved by both the State Duma and the Federation Council, it has reached the final stage of the legislative process. The new tax regime will take effect with Putin’s signature, reinforcing Russia’s regulatory efforts in the cryptocurrency sector.
