This exemption has the potential to boost the use of digital currencies, as it eliminates the tax burden that typically accompanies traditional financial transactions.
Russian President Vladimir Putin signed a law on Friday (29) that recognizes Bitcoin and cryptocurrencies as legal property. In this way, Russia sanctioned the measure within an experimental legal regime (ELR). The move also shows the country's interest in other forms of currency other than the dollar.
Russia’s Bitcoin legislation, signed by Putin, introduces important changes to the cryptocurrency mining sector and digital asset transactions. One of the highlights is the exemption from value-added tax (VAT) for the sale and mining of cryptocurrencies.
This exemption has the potential to boost the use of digital currencies, as it eliminates the tax burden that typically accompanies traditional financial transactions. Profits earned by cryptocurrency miners will be classified as “in-kind income.” Therefore, they will be subject to taxes based on market value, allowing for deductions for operating costs.
From 2025, corporate organizations will pay a 25% corporate tax on their mining revenues. However, operators of mining facilities must report the use of their services to tax authorities, or face fines.
Another key point of the new legislation is the establishment of a specific tax system for profits obtained from cryptocurrencies. The structure consists of two tax brackets:
13% for annual income up to 2.4 million rubles;
15% for higher values.