Russia’s taking a big step towards regulating crypto. President Putin just signed a new law that treats Bitcoin and other digital currencies as property. This means they’ll be taxed, but there are some interesting details.
How Will Crypto Be Taxed?
The new law lays out a system for taxing Bitcoin mining and trading. Here’s the breakdown:
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Mining: Mining Bitcoin will be exempt from VAT (Value Added Tax). However, mining companies need to report their users to the tax authorities. Failing to do so could result in a hefty fine. Income from mining will be taxed as “in-kind income” – meaning it’s based on the market value of the Bitcoin mined, minus mining expenses.
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Trading: Profits from buying and selling crypto will be taxed at two rates: 13% on income up to 2.4 million rubles (~$22,600), and 15% on anything above that. This tax will be combined with taxes on other income like investments and bank deposits.
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Corporations: Companies mining Bitcoin will face a 25% income tax rate starting in 2025. Importantly, they won’t be able to use simplified tax systems available to other businesses.
What This Means for Crypto in Russia
This law sets a clear framework for crypto taxation in Russia. While it introduces taxes, the VAT exemption for mining could encourage more investment in the crypto space. The specific tax rates and reporting requirements will significantly impact how individuals and businesses operate within the crypto market. The law is effective upon official publication, with some parts coming into effect later. The current Bitcoin price is around $98,500.
