MOSCOW: Russian President Vladimir Putin signed a law on taxation of digital currency. The law has been officially published. According to ...
MOSCOW: Russian President Vladimir Putin signed a law on taxation of digital currency. The law has been officially published.
According to the law, digital currency is recognized as property. This includes currency used for foreign trade settlements "under the experimental legal regime in the field of digital innovations".
Mining and selling digital currency will not be subject to VAT. In addition, there will be no taxes on the services of an organization that carries out transactions under the experimental legal regime.
The operator of the mining infrastructure will have to inform the tax authorities who uses its services to issue cryptocurrency. Failure to provide such information in a timely manner will result in a fine of 40,000 rubles ($382.78).
Income and profit taxes
For income tax purposes, digital currency earned through mining is classified as non-cash income (typically used when goods or services are used as payment rather than money). The value of the resulting currency is determined based on market prices. Such income is taxed at the normal progressive rate, taking into account tax deductions equal to the mining expenses.
At the same time, income from the purchase, sale, or other circulation of digital currency will be taxed according to a two-step scale of personal income tax rates - 13% for income up to 2.4 mln rubles ($22,965.7) and 15% for income exceeding this amount. The income will be included in the same tax base as income from transactions with securities, bank deposits, and other sources.
As for corporate income tax, digital currency mining will be taxed at the standard rate - 25% from 2025.
Limitations
The law introduced some restrictions to the tax regime. Organizations and individual entrepreneurs engaged in the mining and sale of digital currency do not have the right to switch to paying a single agricultural tax, to apply a simplified tax system, and to use a special tax regime "Automated Simplified Tax System".
The patent system and the self-employment regime do not apply to mining and transactions with digital currency.
The law enters into force on the day of its official publication, except for provisions for which other terms are established. Some transitional provisions are provided.
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