Russia Approves Amendment to Tax Crypto Transactions and Mining Activities

Russia has approved an amendment to a draft bill introducing taxes on crypto transactions and mining activities, Interfax reported on Nov. 19.

Russia has approved an amendment to a draft bill introducing taxes on cryptocurrency transactions and mining activities, Interfax reported on Nov. 19.

The legislation will classify cryptocurrencies as property for tax purposes. As a result, income generated from Bitcoin mining and trading will be subject to taxation.

However, crypto transactions will be exempt from value-added tax and fall under the same tax bracket as personal income from securities, typically taxed at no more than 15%.

For mining, taxes will be based on the market value of assets at the time they are received. Miners will also be permitted to deduct mining expenses from their taxable income. The new rules will require mining infrastructure operators to submit regular reports on crypto miners using their services.

The Russian Ministry of Finance explained that taxing mining income ensures a fair representation of these activities. It emphasized that the approach balances the state’s interests and those of businesses.

This move is part of Russia’s ongoing effort to regulate the crypto industry. In recent months, the government has taken steps to control crypto mining’s energy consumption and better regulate the sector. This amendment follows the crypto taxation bill introduced in December 2020 after the Russian Federal Tax Service proposed taxing miners’ unrealized gains last month.

In addition, the government has imposed an energy usage limit for Bitcoin miners, restricting unregistered individuals to 6,000 kilowatt-hours of power. Authorities also plan to limit crypto mining in certain regions due to ongoing energy shortages.

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Oluwapelumi values Bitcoin's potential. He imparts insights on a range of topics like DeFi, hacks, mining and culture, underlining transformative power.

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