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Russia Introduces Taxes on Cryptocurrency Transactions and Recognizes Digital Currencies as Property
Russian President Vladimir Putin has signed a federal bill into law, introducing taxes on cryptocurrency transactions and officially recognizing cryptocurrencies as property. The legislation aims to provide a clear regulatory framework for the cryptocurrency market in Russia.
Taxation on Cryptocurrency Sales and Mining Operations
The law imposes a personal income tax of 13%–15% on cryptocurrency sales. The tax rate will be applied progressively, with 13% for income up to 2.4 million rubles and 15% for income exceeding this threshold. Additionally, mining-related expenses will 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. Furthermore, the legislation exempts mining operations from value-added tax.
Regulatory Requirements for Mining Infrastructure Operators
The law mandates mining infrastructure operators to report details of their services to local authorities. Non-compliance will result in fines of 40,000 rubles (approximately $383).
Legal Recognition of Cryptocurrencies
The bill classifies digital currencies, including those used in foreign trade agreements under Russia’s experimental legal crypto regime, as property. This grants them legal recognition and provides a clear framework for their use in the country.
Key Takeaways:
- Cryptocurrency obtained through mining will be treated as income in kind, with its value determined based on market rates.
- Individual entrepreneurs and organizations involved in mining or cryptocurrency sales are not allowed to switch to simplified or specialized taxation systems.
- Registered Russian legal entities and individual entrepreneurs are permitted to participate in mining activities, with some regions facing temporary restrictions due to energy consumption concerns.
Impact on the Cryptocurrency Market
Increased regulatory clarity in Russia is driving demand for cryptocurrencies. The country has seen an 8% rise in crypto exchange traffic, indicating a growing interest in the cryptocurrency market.
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