Key Points:
- Putin signed a crypto law recognizing digital assets as property, exempting mining and trading from VAT in specific cases.
- Law supports international trade settlements using crypto under a regulatory sandbox.
Putin’s crypto law recognizes digital assets as property, exempts mining from VAT, and allows their use in international trade under a new legal framework.
Putin Signs Crypto Law Recognizing Digital Assets and Exempting VAT
Russian President Vladimir Putin has signed a landmark law regulating taxes on digital assets, officially recognizing cryptocurrencies as property.
The new legislation introduces pivotal changes to the treatment of digital assets:
- Cryptocurrencies are now classified as property, enabling their use in international trade under an experimental legal regime (EPR) for digital innovation.
- Mining and selling cryptocurrencies are exempt from value-added tax (VAT).
- Service providers facilitating crypto transactions within the EPR framework are also exempt from taxes.
- Mining operators must disclose information about their clients to tax authorities. Non-compliance results in fines of 40,000 rubles (approximately $371).
Read more: Russian Bitcoin Miners Get a Way Out to Avoid Sanctions
Taxation on Mining and Crypto Transactions
– Personal Income Tax: Cryptocurrencies earned through mining are classified as in-kind income, valued at market rates, and taxed progressively. Mining expenses are eligible for deductions.
– Crypto Trading Income: Profits from buying, selling, or transacting with digital assets are taxed on a two-tier scale:
- 13% for income below 2.4 million rubles (~$22,261).
- 15% for income exceeding this threshold.
These earnings are integrated into the same tax base as securities trading, bank deposits, and other income sources.
– Corporate Tax: From 2025, corporate income from crypto mining will be taxed at a standard rate of 25%.
Restrictions on Certain Tax Regimes
The new law imposes limitations on specific tax regimes for crypto activities:
- Organizations and individuals involved in mining or crypto sales cannot switch to agricultural tax regimes or simplified taxation systems.
- Patent systems and self-employment tax regimes are not applicable to crypto mining or transactions.
The law will take effect upon official publication, with transitional provisions to ensure smooth implementation.
Russia’s Accelerated Push for Crypto Regulation
Before signing this law, President Putin had already approved a crypto-mining law in August 2024. Additionally, Elvira Nabiullina, Governor of the Central Bank of Russia, unveiled plans to implement an international crypto payment system by 2024.
Under this new legal framework, cryptocurrencies will be regulated similarly to foreign currencies in Russia. Oversight will fall under the Central Bank of Russia, with revenue monitoring handled by agencies such as the Federal Tax Service and Federal Financial Monitoring Service.
Russia’s move to legalize crypto has been in the works since 2022, as the country sought to counter Western sanctions over the Ukraine conflict, which heavily impacted its national payment systems.
By 2023, Russia began accelerating its efforts, introducing blockchain-based international payment systems, piloting crypto payment trials, and approving legislation for a digital ruble (CBDC).
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Source: Coincu
