Russian Crypto Traders And Miners Face Hefty New Tax

The Russian government has approved multiple draft changes to a bill that addresses the taxation of income and expenses related to cryptocurrency transactions and mining, according to a recent report by the news agency Interfax on Monday.

Key Details

The proposed changes would categorize cryptocurrencies as property for tax purposes. As a result, income earned through mining will be taxed based on its market value at the time it is received. However, miners would be allowed to subtract expenses incurred in mining activities from their taxable income.

In addition, crypto transactions are set to be exempt when it comes to value-added tax. Income gained through trading will be taxed at the same rates applied to securities transactions, with a maximum personal income tax rate of 15%. The amendments also aim to enforce compliance by requiring mining operators to disclose information about the individuals using their infrastructure.

Maintaining Balance

The Finance Ministry reportedly stated that the decision to tax mining-derived financial income is designed to balance the interests of businesses and the government. The original cryptocurrency taxation bill was introduced in December 2020, and it passed its first reading in 2021, according to Interfax.

Last month, the Russian Federal Tax Service proposed taxing the unrealized gains that miners earn. Earlier this month, the government set a cap on the amount of electricity unregistered individuals could use for Bitcoin (BTC) mining, limiting consumption to 6,000 kilowatt-hours per month.