The Russian Ministry of Finance has unveiled a draft law that seeks to impose taxation on cryptocurrency transactions and mining for individual earners. This initiative, reported by Interfax on Tuesday and sourced from an individual familiar with the developments, marks a significant shift in the regulatory landscape for digital assets within the country. Under the proposed amendments, cryptocurrencies will be classified legally as property.
Individuals generating an income exceeding 2.4 million rubles (approximately $24,000) from cryptocurrency activities will face a tax rate of 15%. In contrast, those earning less than this threshold will be taxed at a rate of 13%. These tax rates are anticipated to be implemented starting 2025. The legislation suggests that profits derived from cryptocurrency trading will be taxed similarly to income from securities transactions, while also being exempt from value-added tax (VAT).
Furthermore, income gained from crypto mining will be evaluated based on the market value of the virtual currencies at the time they were obtained. Miners will also be permitted to deduct relevant operational expenses from their taxable income, creating a more favorable environment for those involved in mining activities. The proposed legislation was reportedly prepared by the Finance Ministry in anticipation of the bill’s second reading, although a specific date for this reading has yet to be confirmed.
At present, the use of cryptocurrencies for purchasing goods and services, as well as crypto trading in general, remains prohibited in Russia. There are some exceptions for specific companies engaged in an experimental external project sanctioned by the Bank of Russia, allowing for the acquisition of such digital assets legally. This draft law represents broader efforts by Russian authorities to establish regulation within the burgeoning cryptocurrency sector. Over the past few months, the government has initiated various measures aimed at reducing the energy consumption associated with cryptocurrency mining and has imposed a ban on advertising for digital currencies.
Additionally, last month, the Russian tax service proposed a tax on unrealized gains for miners, highlighting the growing focus on fiscal oversight in this rapidly evolving market.
