Russian President Vladimir Putin has signed a transformative crypto taxation law that exempts value-added tax (VAT) on cryptocurrency mining and sales. This legislation also formally classifies digital assets as property and introduces a comprehensive tax framework for cryptocurrency transactions.
he law, part of Russia's experimental legal regime (ELR) for digital assets, is a significant step toward formalizing crypto regulations in the country.
Key provisions include a two-tier tax system for individual income from digital currency. For earnings up to 2.4 million rubles, the tax rate is set at 13%, while income exceeding this threshold is taxed at 15%. Corporate income from crypto mining will be taxed at a standard 25% corporate rate starting in 2025, with allowances for mining-related expenses.
Under the new regulations, mining and related transactions will remain exempt from VAT. Operators of crypto-mining infrastructure must notify tax authorities of users engaging in mining activities, with penalties for non-compliance reaching up to 40,000 rubles. For personal income tax, cryptocurrency will be valued based on its market price at acquisition.
Despite the potential benefits, the law imposes certain restrictions. Businesses and individuals engaged in cryptocurrency mining and sales cannot opt for simplified tax systems, including the single agricultural tax or self-employed tax regime. Moreover, these activities fall outside the patent tax framework.
The law comes into force upon its official publication, with staggered implementation timelines for specific provisions. While some countries like Hong Kong pursue full crypto tax exemptions to attract investors, Russia's balanced approach aligns with its growing interest in leveraging cryptocurrencies for foreign trade and sanction evasion amid geopolitical tensions.
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