Putin signs a landmark law introducing taxation and regulations for digital assets.
Cryptocurrency Gains Legal Status in Russia
Russian President Vladimir Putin has enacted a law declaring digital currencies as property, fundamentally changing how cryptocurrencies are taxed and regulated in the country. Announced on Nov. 29, the law allows the use of digital currencies in foreign trade transactions under a legal experimental framework.
New Tax Rules for Mining and Transactions
The law exempts mining and crypto sales from VAT and waives taxes for entities facilitating transactions within the experimental framework. However, mining operators must report user activities to tax authorities, facing penalties of 40,000 rubles ($383) for noncompliance. Income from mining is considered non-cash and taxed after deducting mining expenses.
For individuals, cryptocurrency income will follow progressive tax rates:
- 13% for income up to 2.4 million rubles.
- 15% for income exceeding this threshold.
Corporate entities involved in mining will face a 25% corporate tax starting in 2025.
Restrictions for Crypto-Related Entities
Businesses dealing in mining or cryptocurrency sales cannot use simplified or automated tax systems. They are also excluded from agricultural, self-employment, and patent-based tax options. This ensures strict oversight and transparency in the sector.
Swift Legislative Approvals
The State Duma and Federation Council approved the law in late November, and it became effective immediately upon publication. Provisions include transitional measures to help businesses adapt to the new regulations.
Impact on Russia’s Crypto Landscape
This law positions Russia for greater accountability and integration of digital currencies into its economy. It marks a significant step in aligning domestic crypto practices with international standards.
Disclaimer:
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