Russia has officially recognized cryptocurrency as property, introducing significant tax regulations, including exemptions for mining, progressive income taxes, and high corporate taxes set to begin in 2025.
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Russia Officially Recognizes Cryptocurrency as Property, Introduces New Taxation Framework
Russia has officially classified cryptocurrency as property after President Vladimir Putin signed a landmark law, marking a major step in regulating the sector. Announced on November 29, the law establishes digital currency as part of foreign trade transactions under an experimental legal framework, signaling a shift in Russia's approach to cryptocurrency regulation.
The new law exempts mining and digital currency sales from value-added tax (VAT) and imposes no taxes on entities facilitating transactions within the experimental system. However, mining operators must report their users to tax authorities, with a penalty of 40,000 rubles ($382.78) for noncompliance. Mining income is classified as non-cash earnings and subject to regular income tax, with allowable deductions for mining-related expenses.
The personal income tax on cryptocurrency transactions follows a progressive scale: 13% for income up to 2.4 million rubles and 15% for amounts exceeding that. Starting in 2025, corporate profits from mining will be taxed at 25%.
The Russian State Duma approved the cryptocurrency taxation law in its second and third readings on November 26, and the Federation Council gave its approval on November 27. Afterward, the law was signed by President Putin.
The legislation also restricts certain tax options for businesses involved in cryptocurrency activities, such as mining or sales, preventing them from using simplified, agricultural, or self-employment tax systems. Cryptocurrency activities are excluded from the patent tax system. The goal is to ensure transparency and accountability in the sector. The law is effective immediately, though transitional provisions are in place to assist with its implementation.