Russia Introduces 15% Tax on Bitcoin Mining Profits as New Legislation Moves Forward

Russia is taking further steps to regulate its crypto mining industry, with the government moving forward with draft amendments to tax cryptocurrency mining profits and transactions. These new rules, which were announced by the Ministry of Finance, aim to clarify the tax obligations for cryptocurrency miners and operators of mining infrastructure.

According to a report by Interfax, the draft amendments define cryptocurrencies as property for tax purposes. This means that income generated from mined cryptocurrencies will be taxed based on the market value of the tokens at the time they are received. Crypto miners will also be allowed to deduct related expenses from their taxable income.

Under the new legislation, crypto transactions will not be subject to value-added tax (VAT). Instead, the income generated from these transactions will be taxed similarly to income from securities. The highest personal income tax rate on cryptocurrency earnings is proposed to be set at 15%.

New Requirements for Mining Infrastructure Operators

Operators of crypto mining facilities will also face additional obligations under the proposed amendments. They will be required to notify tax authorities about individuals using their infrastructure for mining activities. However, the specifics of the information that mining operators must disclose about their customers are not yet clear.

The draft amendments also state that, starting from November 1, crypto mining in Russia is only permitted for registered individual entrepreneurs and organizations. Individuals who do not have entrepreneur status will still be able to mine Bitcoin, but only within a consumption limit of 6,000 kWh per month.

Regional Mining Bans and Power Consumption Limits

In addition to the tax changes, the Russian government has also implemented temporary mining bans for certain regions due to ongoing electricity shortages. These restrictions, which will take effect from December 1, 2024, and remain in place until March 15, 2025, are part of efforts to manage the country’s power consumption.

With these new amendments, Russia is aiming to formalize its approach to cryptocurrency mining while generating tax revenue from the growing industry. However, the details around some aspects of the regulation, such as the disclosure requirements for mining facility operators, are still being clarified.

As the global regulatory landscape for cryptocurrencies continues to evolve, Russia’s new tax rules signal a more structured and formalized approach to crypto mining within the country.