Interfax reported on November 19 that Russia has approved amendments to a bill that would introduce taxes on virtual currency transactions and mining activities.
This law will classify cryptocurrencies as assets for tax purposes. As a result, income derived from Bitcoin mining and trading is subject to tax.
However, cryptocurrency transactions are exempt from value-added tax and fall into the same tax bracket as personal income from securities, which are generally taxed at 15% or less.
In the case of mining, taxes are calculated based on the market value at the time the asset is received. Miners will also be allowed to deduct mining costs from their taxable income. Under the new rules, mining infrastructure operators will be required to submit regular reports on the crypto miners using their services.
The Russian Ministry of Finance explained that taxing mining income will ensure that these activities are fairly represented. He emphasized that this approach balances national and corporate interests.
The move is part of Russia's continued efforts to regulate the cryptocurrency industry. In recent months, governments have taken steps to control the energy consumption of crypto mining and better regulate the sector. The amendments follow a virtual currency tax bill introduced in December 2020, after the Russian Federal Tax Service last month proposed taxing miners' unrealized profits.
Additionally, the government imposed energy usage limits on Bitcoin miners, capping electricity usage for unregistered individuals to 6,000 kilowatt-hours. Authorities also plan to restrict cryptocurrency mining in certain regions due to continuing energy shortages.
