Russian President Vladimir Putin has signed a federal law introducing a new tax rule on crypto mining while granting legal recognition to digital currencies as property.
The legislation, detailed in an official document released on November 29, outlines new tax regulations and requirements for the cryptocurrency sector.
Russia’s Crypto Mining Tax: What Does the 13%-15% Tax Mean for Miners and Investors?
According to the official document published on Nov. 29, the legislation establishes a personal income tax of 13% to 15% on cryptocurrency sales while exempting mining operations from value-added tax (VAT).
Under the new law, mining infrastructure operators must report their services to local authorities and provide relevant client information. Reports must be submitted electronically every quarter, with a deadline of the 25th day of the month following the quarter.
Operators who fail to meet this deadline will face fines of 40,000 rubles. This provision will take effect on January 1, 2025.
The law further outlines that income and expenses from cryptocurrency operations, excluding those related to mining, will be included in the general tax base under the experimental legal regime (ELR) for digital innovation.
The ELR allows the use of cryptocurrency for cross-border transactions. The law also proposes exempting services provided by authorized organizations facilitating cryptocurrency transactions under the ELR from taxation.
According to the law, digital currencies, including those used in foreign trade under Russia’s experimental crypto legal framework, are classified as property, granting them legal status.
Cryptocurrency earned through mining will be considered “income in kind,” and its value will be determined by market rates.
This income will be taxed progressively: 13% for earnings up to 2.4 million rubles and 15% for income exceeding that threshold. Mining-related expenses will qualify for tax deductions.
Corporate profits from mining activities will also be taxed at the standard corporate rate, which is set to rise to 25% in 2025.
However, organizations and individual entrepreneurs involved in mining or cryptocurrency sales cannot opt for simplified or specialized tax regimes, such as the single agricultural tax, patent system, or self-employed tax framework.
Crypto Mining in Russia Faces New Hurdles as Energy Crisis Forces Restrictions
Russia’s push to regulate cryptocurrency mining took a significant step forward when it legalized crypto mining in August 2024.
It took effect on November 1, 2024, and only registered Russian entities and entrepreneurs are allowed to mine cryptocurrency. The monthly consumption limit is 6,000 kWh. Additional restrictions apply in energy-challenged regions.
The new law also recognizes digital currencies as property, including those in Russia’s experimental legal crypto regime for foreign trade agreements.
This regulatory clarity has led to a rise in crypto demand, with an 8% surge in traffic to major crypto exchanges in November.
However, the energy-intensive nature of crypto mining has raised challenges due to Russia’s ongoing energy crisis.
On November 19, Deputy Prime Minister Alexander Novak convened a government commission meeting to discuss limiting mining activities in regions facing power shortages during peak seasons.
The government is proposing mining restrictions in key areas, including Irkutsk, Donetsk, Luhansk, Zaporizhzhia, and Kherson, with plans to enforce these limits until 2031. Regions like Buryatia and Zabaikalsky Krai would also face restrictions.
The move could significantly impact Russia’s mining industry, especially companies like BitRiver, which rely on cheap energy in areas like Irkutsk.
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