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Russia proposes taxation on cryptocurrency mining and transactions
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The Russian government has approved draft amendments to a bill regulating the taxation of income and expenses associated with cryptocurrency transactions and mining. The information, released on Monday (18) by the Interfax news agency, cited the country’s Ministry of Finance.
According to the proposal, the idea is to treat cryptocurrencies as property for tax purposes. This means that taxation on revenue obtained from mining will take into account the market value of the asset at the time it is received. However, miners will be able to deduct operating expenses related to their mining activities when calculating taxable income.
Furthermore, the project provides for exemption from value added tax (VAT) for transactions with cryptocurrencies. Meanwhile, trading income will be subject to the same rates as securities transactions, with a personal income tax limit of 15%.
Another point that the project highlights is the requirement that mining operators provide information about the individuals who use their infrastructure. According to the Ministry of Finance, the decision to tax the income generated by mining seeks to balance the interests of companies in the sector with those of the government.
Requirements for cryptocurrency mining operators
The proposal is part of an ongoing effort by Russia to regulate the cryptocurrency sector. The original bill on cryptocurrency taxation was made public in December 2020, with the first reading approved in 2021.
In recent moves, Russia’s Federal Tax Service has suggested that miners’ unrealized gains should also be taxed. Additionally, the government has imposed limits on energy consumption for Bitcoin mining by unregistered individuals, setting a maximum of 6,000 kilowatt-hours per month.
The proposed changes reflect Russia’s attempt to consolidate a fiscal approach to the growing cryptoasset market, seeking to regulate and control activities related to cryptocurrency mining and trading.
While Russia moves towards approving taxation of cryptocurrency transactions and mining, other countries are going in the opposite direction. Japan, for example, is reviewing its rules for the cryptocurrency sector. Authorities intend to assess the effectiveness of current regulation, which deals with cryptocurrencies under the “Payments Law”.
The purpose of the review is to verify whether existing rules offer sufficient protection to investors. If authorities conclude that cryptocurrencies need reclassification as financial instruments, it would bring digital assets under the country’s Investment Law. And this possible reclassification could pave the way for a reduction in taxes on cryptoassets.
On the other hand, countries like Italy are increasing taxation involving cryptocurrencies. As Todaysgist reported, in October this year, the president of Italy, Sergio Mattarella, signed a new bill establishing a 42% increase in taxes on profits obtained from cryptocurrencies, including Bitcoin (BTC).
Russia proposes taxation on cryptocurrency mining and transactions
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Russia proposes taxation on cryptocurrency mining and transactions
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Russia proposes taxation on cryptocurrency mining and transactions
