According to a November 19 Interfax article, Russia has accepted an amendment to a draft bill imposing taxes on cryptocurrency transactions and mining activity.
The crypto tax law places additional financial requirements on miners and traders by treating digital currency like real estate.
According to the law, cryptocurrency will be considered property for taxation purposes. Consequently, profits from mining and trading Bitcoin will be liable to taxes.
On the other hand, cryptocurrency transactions will not be subject to value-added tax and will be taxed at the same rate as securities-related personal income, which is usually 15%.
The assets’ market value will determine taxes on mining at the time of receipt. Additionally, mining costs will be deductible from taxable income for miners. Operators of mining infrastructure will have to report cryptocurrency miners regularly under the new regulations.
According to the Russian Ministry of Finance, levying taxes on mining profits guarantees that these operations are fairly represented. It underlined that the strategy strikes a balance between the interests of enterprises and the state.
This action is a component of Russia’s continuous endeavor to control the cryptocurrency sector. In recent months, the government has taken action to regulate the cryptocurrency mining industry better and reduce its energy consumption. Following the Russian Federal Tax Service‘s proposal last month to tax miners’ unrealized gains, this modification follows the crypto taxation bill filed in December 2020.
The government has also set an energy usage cap for Bitcoin miners, limiting unregistered users to 6,000 kWh of electricity. Because of persistent electricity constraints, authorities also intend to restrict cryptocurrency mining in specific areas.