Russia Approves Clearer Tax Rules for Crypto Mining and Trading

Key Takeaways

• The Russian parliament approved the crypto tax amendments proposed last week.
• President Putin must approve and sign the amendments for the tax act to become law.
• The new tax policy exempts crypto mining and trading activities from value-added tax (VAT).

Russia’s upper house of parliament approved the crypto tax amendments proposed on Nov. 19.

These amendments clarify how crypto mining and trading activities are taxed, reflecting the country’s evolving stance on digital assets.

The new legislation follows Russia’s broader push to establish a comprehensive framework for cryptocurrencies, which gained momentum earlier this year.

Russian Parliament Greenlights Tax Rules

Russia’s Federation Council, the upper house of parliament, has approved a key tax amendment proposal that will exempt crypto mining and transactions from value-added tax (VAT).

The amendment, introduced on November 19, received final approval on Nov. 27 after passing through the State Duma, the lower house, a day earlier.

In a statement , the Federation Council outlined that the revisions are part of broader efforts to define cryptocurrencies as property under Russian law.

The changes are designed to create a more favorable regulatory framework for the country’s crypto sector.

The bill now requires President Vladimir Putin’s signature to become law. Putin has shown increasing interest in developing Russia’s digital economy.

If signed, the legislation is expected to significantly boost Russia’s crypto industry by removing some of the financial hurdles associated with crypto mining and transactions.

Crypto Taxes to Not Exceed 15%, No VAT

Under Russia’s new guidelines, profits from crypto trading will be taxed at rates comparable to securities trading. Income from mining activities will also be taxed at market value, with provisions allowing miners to deduct expenses incurred during operations.

The new amendments establish a 15% tax cap on income generated from crypto activities while exempting crypto transactions from value-added tax (VAT).

The Finance Ministry emphasized that the approach ensures a fair balance between the state’s interests and the businesses operating in the crypto space. According to a report by Interfax , crypto assets are now classified as property for taxation purposes, further solidifying the legal framework around digital currencies.

Additionally, as part of the legislation, crypto mining farms and pools offering services to individual miners must report these miners to tax authorities, ensuring transparency in the system.

Stricter Regulations for Crypto Mining

The new tax laws follow stricter regulations introduced by the Russian government for crypto mining. Passed just weeks earlier, these rules aim to address electricity theft and shortages associated with crypto mining activities.

The amendments require enterprise-level mining operations and pools to register with the Federal Tax Service (FTS).

Individual miners are exempt from registration but must operate within regulated electricity bandwidths. Moreover, state governments now have the authority to ban crypto mining in specific regions if local conditions warrant such measures.

Crypto Amid Sanctions and Economic Challenges

Russia’s move toward crypto legalization earlier this year came amidst severe international trade sanctions.

Despite initial resistance from the central bank, the legislative council approved measures to permit crypto trading, mining, and cross-border transactions.

This regulatory shift is part of Russia’s strategy to integrate crypto into its economy while addressing concerns about energy consumption and tax compliance.

With these laws in place, Russia hopes to create a more structured and transparent crypto ecosystem, balancing the interests of businesses, the state, and individual participants.