The Russian government has approved a bill that regulates taxes on crypto transactions. What will now change in the country's tax base?
The Russian the government has passed a regulatory bill cryptocurrency fees. Prepared by the Ministry of Finance, the bill gives the status of crypto ownership, from local media reports. This means that companies will have to pay income tax on crypto transactions, while individuals will be subject to personal income tax.
The rate for Russian citizens will change from next year depending on their income – from 13% to 22%. Crypto transactions will not be subject to value added tax however. Citizens and legal entities must report crypto transactions to the Federal Tax Service if receipts and write-offs exceed 600,000 rubles per year (about $6,000 as of press time).
Crypto mining infrastructure operators must transfer data about the services provided to the tax service. If the information is not received within the specified time, there will be a fine of 40,000 rubles (about $400) on the site. It should be noted that the bill was prepared back in December 2020, but back then its consideration was stopped. Adoption of the provision emerged after crypto mining was legalized in Russia on November 1, 2024. After registering in a special register of the tax service, companies and individual entrepreneurs can mine crypto (eg Bitcoin).
How will the tax on profits from crypto be paid?
The tax on mining profit will include two steps. First, miners make a prepayment Then, an additional fee applies when the digital asset is sold. If the value of the miner's coins increases after the first payment, miners will have more tax. Conversely, if the value falls, prepayments can be recorded as a loss.
According to the latest proposal from the Ministry of Finance of Russia, the tax rate for the sale of digital currency can be 13% starting in 2025 and 15% if a citizen's income exceeds 2.4 million rubles (approx. on $24,000) per year. As Russian state-controlled media Interfax reportsdigital currency is recognized as an asset for the purposes of the Tax Code.
The same principle was included in the bill in its first reading, which happened more than three years ago. Income from transactions with digital currency will be included in the general tax base along with income from the sale of shares, bonds, investment units, repo transactions with securities, and income from transactions with securities in individual investment accounts and deposits in Russian banks. This will take place in 2025.
If a person's total annual income from all these sources does not exceed 2.4 million rubles, the personal income tax will be 13%. If this amount is exceeded, the tax will be 15% of the amount exceeding 2.4 million rubles, plus a fixed amount of 312,000 rubles (about $3,100), equal to 13% of 2.4 million rubles. In addition, the ministry will determine the amount of tax as follows: the tax base will be determined according to the market price of the digital currency at the time of receipt of income.
Foreign exchange agencies will set the market price (closing price) based on transactions completed during the day. Foreign trade organizations are those whose cryptocurrency trading volume exceeds 100 billion rubles ($1 billion) per day.
If transactions for the same digital currency were made on two or more foreign crypto exchanges, the taxpayer can independently choose the market price. In this case, the money from the sale of cryptocurrency will be calculated according to the actual sale price, but it is not lower than the market price reduced by 20%.
Russia is following the path of North America
The media noted that the mechanism for paying taxes on cryptocurrency is created according to the North American approach.
As explained by Oleg Ogienko, deputy general director for communications at BitRiver, the miner's profit tax will be raised when crypto is received in a wallet without reasonable and recorded costs. Miners can also get back part of the fee paid if their expenses are proven to be necessary.
“As far as can be seen, the proposed equipment is created according to the North American method. That is. First, the miner's profit fee is charged when cryptocurrency is received in the wallet, without reasonable and recorded costs. Then, the miner's capital gains tax is charged when the cryptocurrency is withdrawn from its original wallet.”
Oleg Ogienko
Unlike Russia, US taxes vary depending on how long the cryptocurrency is held. Short-term holdings are taxed at rates between 10% and 37%, depending on income. Long-term holders have lower rates of 0%, 15%, or 20%.
