In a significant move towards regulating the cryptocurrency sector, the Russian government is set to exempt cryptocurrency trading and custodial services from value-added tax (VAT). As emphasized in the official statement, this initiative is part of a broader effort to establish a clear legal framework for digital currency operations within the country.
New Legislation on Cryptocurrency Taxation in Russia
The Ministry of Finance in Moscow has already drafted the necessary legislation, which outlines the taxation of profits generated by entities involved in cryptocurrency activities, as well as the personal income of digital currency traders. A key aspect of the proposed amendments to Russia's Tax Code is the VAT exemption for services provided by cryptocurrency exchanges and digital asset depositories.
Exemption for Related Services
Additionally, the exemption will extend to other related services that facilitate the issuance and trading of digital currencies. While the full list of exempt services is still being finalized, the legislation aims to create a more favorable environment for crypto businesses operating in Russia.
- Services provided by cryptocurrency exchanges
- Digital asset depositories
- Other related services that facilitate the issuance and trading of digital currencies
Corporate Taxation Framework
Under the new framework, profits earned by crypto exchanges and custody platforms will be subject to corporate taxation, following rules akin to those applied to professional participants in the securities market. Importantly, the legislation does not offer preferential treatment, as Russia plans to implement its standard tax regimes while considering specific nuances of the cryptocurrency sector.
In a recent development, Algorithm has called for the rejection of a controversial electricity pricing model that could impact the cryptocurrency mining sector in Russia. This contrasts with the government's new legislation on cryptocurrency taxation, which aims to create a more favorable environment for crypto businesses. For more details, see read more.
