Russia’s New Crypto Tax Law, Crypto Mining, and Sales Now Tax-Free!

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Russia has taken a bold step in regulating its booming cryptocurrency market. Russian President Vladimir Putin has signed a law that lays out detailed taxation rules for cryptocurrency activities like mining, buying, and selling. This move not only clarifies how digital assets will be taxed but also sets the tone for Russia’s evolving stance on crypto.

Russia’s New Crypto Tax Rules

The new law officially recognizes cryptocurrency as property for tax purposes, bringing it into the mainstream financial system. For individuals, profits from crypto activities will now be taxed on a tiered basis: 13% for earnings up to 2.4 million rubles and 15% for anything above. 

On the other hand, businesses involved in mining will face a corporate tax rate of 25%, starting in 2025.

The law takes effect upon its official publication, but certain provisions, including reporting requirements and corporate tax rates, will be phased in by 2025.

Taxation Framework for Mining and Trading

However, income from mining is now categorized as “income in kind” and taxed based on market prices. The good news for miners is that they can deduct operational costs, such as electricity expenses, reducing their taxable income. 

This framework aims to make crypto mining more transparent while encouraging compliance with the law.

When it comes to trading, taxes will be calculated using the market value of the cryptocurrency on the day of the transaction. To ensure fairness, traders can use pricing data from foreign exchanges that meet specific criteria, such as trading volume and historical data availability.

Exemptions for Cross-Border Transactions

Interestingly, cross-border crypto transactions under the Experimental Legal Regime (ELR) will remain tax-free. This exception highlights Russia’s intent to promote innovation while maintaining control over domestic operations.

Strict Reporting Rules & Penalties

Mining facility operators will now have to report their users’ activities to tax authorities every quarter. Failing to meet these deadlines could result in fines of up to 40,000 rubles, underlining the government’s push for greater oversight in the industry.