President Vladimir Putin has signed a new law aimed at regulating cryptocurrency mining and transactions in Russia. This law acknowledges digital currencies as property and amends the country’s Tax Code. While cryptocurrency mining and sales will not incur value-added tax, operators must report their activities or face fines. Cryptocurrency trading will attract a 13% income tax on earnings up to about $22,300, with a higher rate for larger profits. Corporations that deal in cryptocurrency will be taxed at a standard rate of 25 starting next year. Russia anticipates collecting around $2 billion annually from these taxes, as it seeks to enhance oversight of its growing cryptocurrency industry.
Russia Takes Steps to Regulate Cryptocurrency with New Tax Law
In a significant move towards regulating its cryptocurrency industry, President Vladimir Putin signed a new law on Friday that establishes a framework for taxing cryptocurrency mining and transactions. This law marks a crucial step as Russia seeks to better govern its digital currency landscape.
Under this new law, cryptocurrency is officially recognized as property in amendments made to the country’s Tax Code. Importantly, it excludes cryptocurrency mining and sales from the value-added tax (VAT). However, miners must report their operations to local authorities or risk facing a fine of 40,000 rubles, which is about $380.
When it comes to cryptocurrency trading, the law sets income taxes at a tiered rate: 13% for earnings up to 2.4 million rubles (approximately $22,300) and 15% for earnings above that threshold. Corporations involved in cryptocurrency activities will face the standard corporate tax rate of 25%, starting next year. Most aspects of this law are expected to come into effect immediately, though some provisions will have delayed implementation.
Russia, known as one of the major players in the cryptocurrency mining scene, anticipates generating up to 200 billion rubles (around $2 billion) annually from miners under this new regulation.
Additionally, Russia’s tax service recently launched a database that lists government-approved large-scale miners, following a law signed by Putin earlier this year. Another law allows the Central Bank to start a pilot project for cross-border cryptocurrency transactions, aimed at facilitating purchases of restricted goods in international markets. This comes amidst ongoing threats from the United States to sanction financial institutions that assist Russia in acquiring banned military supplies.
As the legal landscape surrounding cryptocurrency evolves, these changes suggest that Russia is laying the groundwork for a more structured and regulated cryptocurrency environment.
Tags: Russia, Cryptocurrency, Tax Law, Putin, Cryptocurrency Mining, Digital Currency, Regulation, Tax Code
What is the new law about cryptocurrency tax in Russia?
The new law requires people and companies in Russia to pay taxes on their cryptocurrency gains.
When will this law start?
The law is set to take effect from January 1, 2024.
Who needs to pay these taxes?
Anyone who earns money from buying or selling cryptocurrencies must pay taxes.
How will the taxes be calculated?
Taxes will be based on the difference between the purchase price and the selling price of the cryptocurrency.
What happens if someone doesn’t pay the tax?
If people don’t pay the tax, they could face fines or other penalties from the government.
