In an important step towards the successful regulation of digital assets in the country, Russian President Vladimir Putin signed a law creating a new legal framework to tax bitcoin mining and transactions, recognizing them as property and setting the stage for formal taxation.
The new Russian tax law on bitcoin and cryptocurrencies
According to local media informationDigital currencies, including bitcoin, will be classified as property under new law. This classification extends to the currencies used for foreign trade settlements within the framework of the Experimental Legal Regime (REP) in digital innovation.
In particular, the law stipulates that the mining and sale of digital currencies will be exempt from value added tax (VAT), which could encourage greater investment and participation in the cryptocurrency market.
One of the key provisions of the law requires mining infrastructure operators to inform tax authorities about users of their services to cryptocurrency emission. Failure to provide this information promptly could result in a fine of 40,000 rubles ($380).
As for income tax implications, cryptocurrencies obtained through mining will be classified as “income in kind”, a term typically used to describe non-cash payments realized in the form of goods or services.
The value of the mined cryptocurrency will be determined based on current market prices. These income will be subject to a progressive tax scale, allowing deductions related to mining expenses.
25% tax rate from 2025
The law also outlines a two-tier tax system for income generated from the acquisition, sale or other forms of circulation of cryptocurrencies.
Income up to 2.4 million rubles ($22,600) will be taxed at a rate of 13%, while any income exceeding this threshold will be subject to a 15% tax. These profits will be included in the same tax base such as income from securities, bank deposits and other financial sources.
For corporations engaged in bitcoin mining, a standard income tax rate of 25% will apply from 2025. However, the legislation limits the tax regimes available to organizations and individual entrepreneurs (IPs) involved in activities. of cryptocurrencies.
Specifically, these entities will not be allowed to adopt a single agricultural tax, use a simplified tax system, or benefit from the “Automated Simplified Tax System.” The patent system and the self-employed regime will also not apply to bitcoin mining and proceedings.
The law will come into force upon its official publication, and certain provisions are subject to different deadlines. Transitional provisions have also been included to facilitate the application of these rules.
At the time of writing, the leading cryptocurrency is trading at $98,500 after a brief 7% correction earlier this week, inching closer to its all-time high of $99,500.
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