Russiais working on a new regulation to tax cryptocurrency income. According to the draft regulation prepared by the Russian Ministry of Finance, cryptocurrency income will be taxed at 15 percent. According to Russian news agency Interfax, the regulation covers both cryptocurrency mining and trading.
Property Classification of Cryptocurrencies
Draft editing cryptocurrencyIt classifies assets as “property” for tax purposes. This means that revenues from mining will be taxed at market value. However, mining expenses can be deducted from this income. Thus, only net income will be taxed.
On the other hand, cryptocurrency transactions value added taxwill be exempt from. Gains from cryptocurrency trading will be taxed like securities gains. The individual income tax rate will be capped at 15 percent.
The new regulation aims to make mining operations more transparent. For this purpose, the information of people using the mining infrastructure will be reported. The Russian Ministry of Finance stated that this step will ensure balance between both businesses and the government.
New Limit in Mining and Reporting Obligation
Russia also imposes other restrictions on mining. Last month, the Federal Tax Service proposed taxing miners’ unrealized profits. In addition, monthly electricity consumption for individual miners was limited to 6 thousand kilowatt-hours.
The bill, which was first introduced in 2020, passed the first vote in 2021. new changes cryptocurrency marketIt is being developed with the aim of regulating public health and increasing state revenues.
According to experts, all these steps are a reflection of Russia’s effort to further control the cryptocurrency market. While cryptocurrency investors in the country are closely following the implementation process of this regulation, it is a matter of great curiosity how its final form will be.
Disclaimer: The information contained in this article does not constitute investment advice. Investors should be aware that crypto currencies carry high volatility and therefore risk, and should carry out their transactions in line with their own research.
