Russia is changing laws governing miners and transactions and is proposing a 15% tax on cryptocurrency profits.
Source: CryptoSlate
By suggesting a 15% tax on profits from cryptocurrency transactions, Russia is attempting to control its expanding cryptocurrency industry. The Ministry of Finance has proposed this modification to clarify the framework for taxing cryptocurrency miners and transactions.
Russia’s New Crypto Tax Structure
The proposed 15% personal income tax rate on cryptocurrency revenues is a significant part of the new law and a significant step toward formalizing the sector’s taxation.
Miners will deduct operating expenditures, which will provide a fair tax computation, and income from mined tokens will be taxed at market value upon receipt.
Source: X Post
Cryptocurrencies will be considered property for taxation under the proposed revisions. Value-added tax (VAT) on cryptocurrency transactions is eliminated under the new structure.
Rather, the revenue derived from these transactions will be subject to the same taxation as that of securities transactions. The proposed regulations also impose duties on mining infrastructure operators.
When people use their facilities for mining, operators will have to report it to the tax authorities. It’s still unclear exactly what information needs to be revealed.
Russia’s goal to increase control and transparency over the cryptocurrency mining industry is reflected in this action.
Unrealized Profits, Cryptocurrency Tax Consequences, and the Change in Russian Digital Currency
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The Federal Tax Service (FNS) has suggested taxing cryptocurrency miners on unrealized earnings as Russia proceeds with regulatory actions; this means that miners may be subject to taxes on coins they have not yet sold.
President Vladimir Putin passed legislation on October 28, 2024, giving the FNS control over Russia’s cryptocurrency mining registry.
The FNS requires industrial miners to register. As long as they stay under energy consumption guidelines, home-based miners are not required to register.
Russia’s financial industry is adapting to the expanding digital currency market.
Limitations on Crypto Mining and Issues with Electricity
Russia is tackling its energy issues besides the proposed tax. Individual miners are only permitted to use 6,000 kWh per month as of November 1, and only registered miners are permitted to operate lawfully. In certain areas, temporary mining bans will be implemented from December 1, 2024, to March 15, 2025, in order to address the lack of electricity.
