Russia Signs Law Regulating Digital Asset Taxation

Russian President Vladimir Putin has signed a new law setting digital asset taxation rules. According to a local report, the law recognizes digital currencies as property. It provides clear guidelines for their taxation, including regulations for mining, selling, and transactions within the experimental legal regime (ELR) program.

Russia’s New Tax Law

The new legislation explains that mining and selling digital currencies do not incur value-added tax (VAT), and there are no taxes on services from organizations working within the ELR. However, mining facility operators must report to tax authorities who use their services to issue cryptocurrencies.

Under the new law, crypto earned by individual investors through mining activities will be treated as income. This income will be taxed based on its market value when mined. The tax rate would be progressive, allowing deductions for mining expenses.

Income from buying, selling, or using digital currencies will be taxed at 13% for amounts up to 2.4 million rubles ($22,643) and at 15% for amounts over that. This income will be treated like income from stocks, bank accounts, and other financial transactions. Starting in 2025, digital currency mining will be taxed at 25% for businesses.

The law will take effect on the day it is officially published, though some parts may start at different times. There are transitional provisions to help with the implementation process.

Like Russia, other countries have explored crypto taxation. These include Denmark, Kenya, Italy, Nigeria, and the United States.

Russia Embraces Crypto

The latest legislative action is among several moves the Russian government has made to embrace the crypto industry. In August, the president approved a law that allows crypto mining in the country. The law permits registered mining companies and some individuals to mine Bitcoin and other cryptocurrencies legally, supporting Russia’s efforts to regulate and advance its cryptocurrency industry.

In another report, the Asian country revealed plans to establish two crypto exchanges. These exchanges would support the government’s foreign economic activity (FEA).