Amendments to a number of bills clarify the roles of government agencies in the mining sector and tighten the rules for cryptocurrency mining

The State Duma simultaneously passed a law in the second and third readings that clarifies the details of regulating mining in Russia. The document, which amends other bills, was sent to the Federation Council; if approved, the new regulations will come into force on November 1.

The Law on Electric Power Industry will now allow the government to ban mining (including participation in a mining pool) in individual regions of the country or, importantly, only in individual territories. The Cabinet of Ministers will also establish the conditions and procedure for introducing such a ban.

The Ministry of Finance named the most important aspect of legalizing mining

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According to the provisions of the law on mining adopted in the summer, from November only those companies and individual entrepreneurs who are listed in a special register will be able to mine cryptocurrency in Russia. Private miners do not need to register in the register, but they also cannot exceed the energy consumption limits set by the government.

The new document amends the law "On digital financial assets and digital currencies". According to the new provisions, the Federal Tax Service will maintain the register of miners instead of the Ministry of Digital Development. And mining infrastructure operators (hosting providers) will be prohibited from providing services to miners who are not included in the Federal Tax Service register or excluded from it.

The range of entities to which the addresses of miners' wallets from the FTS register can be transferred, if necessary, is also expanding: executive authorities, prosecutors, inquiry and preliminary investigation bodies have been added to Rosfinmonitoring, the FSB, the FTS and the Federal Property Management Agency.

In mid-October, the State Duma revealed details about the rules for taxing miners that are being prepared. According to deputy Anton Gorelkin, an option is currently being considered in which mining in data centers will be subject to income tax. For all other types of mining, an analogue of the single tax on imputed income (UTII) with a variable rate will apply.

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Taxation under the UTII (unified tax on imputed income) that was in effect until 2021 was different in that for some types of activities the amount of expected income was determined in advance, explained Igor Gribkov, head of the tax practice at the EBR law firm and expert at the Moscow Digital School educational platform. He specified that no matter how much the taxpayer earned, he had to pay tax on this specific (imputed) amount of income at the established rate.

If a similar mechanism were applied to miners, they would have to pay a tax on their income, the amount of which would be set in advance, the lawyer says. The tax rate could be determined based on how much electricity the miner consumed during the relevant period.

As for the income tax that is supposed to be collected from miners working in data centers, the Federal Tax Service previously said that a two-stage tax calculation is supposed: an advance payment from the receipt of cryptocurrency to the miner's wallet and a subsequent additional payment or accrual of losses depending on the rate when selling cryptocurrency.

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