Russian Lawmakers Approve Tax Exemption Proposal for Digital Asset Issuers

A few days after Russian authorities presented a bill seeking to govern the illegal issuance of crypto if approved, the country’s policymakers have signed a proposed law to exempt token issuance from paying value-added taxes (VAT), Reuters reported.

Russian Lawmakers Pass Crypto Issuance Bill

The drafted bill was approved by State Duma members, one of the chambers of the Russian parliament, the Federal Assembly, during their second and third readings earlier this week. The chamber consists of 450 members responsible for enacting policies in the country.

Unlike the first bill put forward on June 22 that seeks to penalize individuals and companies involved in illegal cryptocurrency issuance, the newly drafted proposal aims to allow digital asset issuers to create and launch tokens without attracting VAT. 

According to the report, the drafted law would only be enforced after a thorough examination from other authorities. The bill would be passed to the Federation Council, also called the upper house, representing the interests of regions in the nation. After proper scrutiny, it would be signed by the Russian President, Vladimir Putin, before it becomes effective.

In addition to seeking to exempt digital asset issuers from paying VAT, the drafted law sets new tax rate standards on profits generated from the sale of cryptocurrencies. 

The current rate on crypto transactions is 20%, and the same goes for standard assets.  Under the new law, the tax would be 13% for Russian companies and 15% for foreign ones.

Russia Defines Crypto as Financial Assets

Russian financial regulators and lawmakers have been working towards establishing a regulatory framework for the use of cryptocurrencies in the country.

Before now, the Bank of Russia proposed a blank ban on Bitcoin mining and crypto activities. However, the country’s finance ministry believes regulating crypto assets is more profitable than banning them. 

As the disagreement continued, President Putin urged both bodies to reach an accord concerning the legal status of digital assets. Both institutions are now working on a draft law defining cryptocurrencies as a legal form of currency.