Russia is developing new regulations to tax cryptocurrency revenues. According to a draft regulation prepared by the Ministry of Finance, cryptocurrency earnings will be taxed at a rate of 15%. This regulation encompasses both cryptocurrency mining and trading, as reported by the Russian news agency Interfax.
Classification of Cryptocurrencies as Property
The draft regulation classifies cryptocurrencies as “property” for taxation purposes. This means that income from mining will be taxed based on market value. However, mining expenses can be deducted from this income, so only net profits will be taxed.
Additionally, cryptocurrency transactions will be exempt from value-added tax. Profits gained from cryptocurrency trading will be taxed similarly to capital gains. The personal income tax rate will be limited to 15%.
New Limits and Reporting Requirements in Mining
Russia is imposing further restrictions related to mining. Last month, the Federal Tax Service proposed taxing unrealized gains of miners. Moreover, individual miners will have a monthly electricity consumption limit set at 6,000 kilowatt-hours.
Initially introduced in 2020, the bill passed its first vote in 2021. The new amendments are aimed at regulating the cryptocurrency market and increasing state revenues.
Experts believe these measures reflect Russia’s efforts to exert greater control over the cryptocurrency market. Cryptocurrency investors in the country are closely monitoring the implementation process and are curious about the final form of the regulations.
