Russia rolls out 15% tax on crypto earnings

Russia is planning to regulate cryptocurrencies with a new 15% tax on earnings from crypto transactions.

The initiative, introduced by the Ministry of Finance, aims to provide a clearer framework for taxing cryptocurrency miners and related transactions.

Under the new regulation, individuals who earn crypto through mining will be taxed based on the market value of the tokens at the time they are received.

Miners will also be allowed to deduct expenses related to their mining operations, offering some relief to this capital-intensive industry. This should help balance the tax calculation, according to Interfax.

The regulation stipulates that cryptocurrencies will be treated as property for tax purposes. As a result, the value-added tax (VAT) on crypto transactions will be eliminated. Instead, income from these transactions will be taxed like securities, with a personal income tax rate of up to 15%.

The draft also introduces new rules for cryptocurrency mining operators. These operators will be required to notify tax authorities about individuals using their facilities for mining. However, it is still unclear what specific data must be disclosed.

This revision comes as the government moves to tighten its control over the industry. One example of this is the recent signing by President Vladimir Putin of a law transferring oversight of the cryptocurrency mining registry to the Federal Tax Service (FNS).

While the 15% tax rate may seem moderate compared to some global standards, the removal of VAT and the introduction of expense deductions could make mining more manageable for some operators. However, the new reporting requirements for mining operators may add complexity and costs, potentially affecting small miners.

These changes suggest that Russia is preparing to establish a firmer regulatory framework for the crypto sector, signaling a potential shift in how cryptocurrency is handled in the country moving forward.