Russian President Vladimir Putin has enacted a new law that officially recognizes cryptocurrencies as property within foreign trade activities. This significant legislation exempts cryptocurrency mining and sales from value-added tax (VAT), as reported by the state news outlet TASS. The law also sheds light on the necessary reporting processes concerning mining operations.
How Will Cryptocurrency Mining Income Be Taxed?
According to this law, income generated from cryptocurrency mining will be categorized as “in-kind income,” subject to market-based taxation. Miners can deduct their operational expenses from their taxable income. Furthermore, individual miners will encounter a two-tier tax structure with a 13% rate on earnings up to 2.4 million rubles and a 15% rate on amounts exceeding this threshold. From 2025 onward, companies involved in cryptocurrency mining will face a corporate tax rate of 25% on their profits.
What Are the Reporting Requirements for Miners?
The law establishes strict reporting duties for operators of mining infrastructure, mandating them to disclose customer information to tax authorities. Noncompliance could lead to penalties of up to 40,000 rubles.
Most of the provisions in the law will come into effect upon publication, with some transitional measures expected. Additionally, a prior law was passed in August that restricts cryptocurrency mining to registered entities. These legislative steps aim to enhance transparency and regulation in Russia’s cryptocurrency sector.
- Cryptocurrency mining now classified as in-kind income.
- Two-tier tax rates introduced for individual miners.
- Strict reporting requirements imposed on mining operators.
- Penalties for failure to comply with reporting obligations.
This new legal framework marks a pivotal moment for the cryptocurrency landscape in Russia, pushing for more accountability and integration into the formal economy. With the introduction of these regulations, the country is setting a precedent in its approach to digital currencies.
Disclaimer: The information contained in this article does not constitute investment advice. Investors should be aware that cryptocurrencies carry high volatility and therefore risk, and should conduct their own research.
Source: https://en.bitcoinhaber.net/putin-signs-law-on-cryptocurrency-property-status