Russian President Vladimir Putin has signed a law that recognizes cryptocurrencies as property in foreign trade transactions. This new regulation exempts cryptocurrency mining and sales from value-added tax (VAT) and establishes reporting rules for mining infrastructure operators.
Taxation of Cryptocurrency Mining Income
Under the law, cryptocurrency mining income will be classified as 'in-kind income' and taxed based on market conditions. Mining expenses can be deducted from the taxable base. Individual investors will face a two-tier tax system for cryptocurrency income, with a 13% tax on earnings up to 2.4 million Russian rubles, and a 15% tax on income exceeding this amount. From 2025, companies engaged in cryptocurrency mining will be subject to a standard corporate tax rate of 25% on their earnings.
Reporting Obligations for Mining Infrastructure Operators
The new regulation imposes comprehensive reporting obligations on mining infrastructure operators. They must report their customers’ information to tax authorities. Failure to comply with this obligation may result in fines of up to 40,000 Russian rubles.
Imposing Restrictions and Market Transparency
Most of the law will take effect from the date of publication, although transitional provisions are anticipated for some articles. In August, another law was signed, limiting cryptocurrency mining activities to registered entities. Through these regulations, Russia aims to make its cryptocurrency market more transparent and manageable.
The new law signed by Vladimir Putin marks a step toward recognizing cryptocurrencies as a significant part of foreign trade, while also setting clear taxation and reporting standards. Despite the VAT exemption, market participants will face new requirements and obligations.
