In November 2024, Russia’s Federation Council, the upper house of parliament, approved a federal bill introducing a comprehensive taxation framework for cryptocurrency transactions and mining activities.
Key Provisions of the Legislation:
- Recognition as Property: Digital currencies are officially recognized as property under Russian law, granting them legal status and subjecting them to property rights and obligations.
- Income Tax on Crypto Sales: Individuals earning income from cryptocurrency sales are subject to a progressive personal income tax rate:
- 13% for annual income up to 2.4 million rubles.
- 15% for income exceeding this threshold.
- Exemption from Value-Added Tax (VAT): Cryptocurrency mining operations and sales are exempt from VAT, reducing the tax burden on these activities.
- Mandatory Reporting for Miners: Operators of crypto-mining infrastructure are required to report their activities to local authorities. Non-compliance may result in fines of 40,000 rubles (approximately $360).
- Corporate Taxation: Starting in 2025, corporate entities engaged in cryptocurrency mining will be subject to the standard corporate tax rate of 25%.
Implications for the Crypto Ecosystem:
This legislative development positions Russia as a significant player in the global cryptocurrency landscape, potentially attracting investors and businesses seeking a regulated environment. The clear legal status of digital currencies and the structured tax framework may enhance transparency and legitimacy within the Russian crypto market.
Global Context:
Russia’s move aligns with a broader trend of countries establishing regulatory frameworks for cryptocurrencies. As nations like the United States and members of the European Union develop their own crypto regulations, Russia’s approach reflects its intent to integrate digital assets into its financial system while ensuring regulatory oversight.
