28 November 2024 – (Moscow) By passing a crypto tax bill, Russian lawmakers have taken a big step toward regulating the cryptocurrency mining industry. According to Komsomolskaya Pravda, the State Duma passed the bill during its second and third readings, requiring industrial Bitcoin miners to pay taxes on their earnings.
Steps for the Crypto Tax Bill’s Final Approval
Prior to being delivered to President Vladimir Putin for his signature, the approved law will now proceed to the Russian Senate for a final assessment. These procedures are anticipated to be completed in a matter of days, given the State Duma’s prompt measures.
Framework for Crypto Miners’ Taxation
Bitcoin miners who make up to 2.4 million rubles (about $21,210) a year will pay a fixed 13% tax under the proposed changes to the Russian Tax Code. A higher rate of 15% will be applied to miners whose income exceeds this amount. By formally acknowledging cryptocurrencies as a type of “property” in Russia, this new law resolves long-standing legal issues around their classification in Russian courts, marking a significant turning point.
Reporting Requirements and Exemptions
Additionally, the law establishes particular standards and exemptions for miners. The value-added tax (VAT) on tokens mined and sold on cryptocurrency exchanges will not apply to them. Nonetheless, miners are required to notify the Federal Tax Service (FTS) of their operations. According to the measure, noncompliance could result in fines of up to 40,000 rubles ($354).
Russia’s Increasing Effort to Regulate Crypto Mining
This tax law expands on Russia’s previous efforts to control bitcoin mining. President Putin signed the nation’s first law legalizing cryptocurrency mining in August, and it went into force on November 1. In addition, the government issued orders to temporarily stop mining in areas with low energy supplies throughout the winter. Approximately 150 businesses have applied for operational permissions to the FTS thus far, and more are anticipated to follow.
Increased Demand for Hardware for Crypto Mining
The demand for cryptocurrency mining equipment has skyrocketed throughout Russia as a result of regulatory clarity. Lenta says that weekly mining rig acquisitions have increased from about 30 at the start of the year to almost 600 in recent weeks. This increase has caused mining equipment prices to rise by 10% to 15%, according to the Moscow-based Mining Group.
