The Russian government has approved draft amendments to a bill on taxing income and expenditures from crypto transactions and mining, Russian news agency Interfax reported on Monday, citing the country’s Finance Ministry.
Under the proposed legislation, cryptocurrencies will be classified as property for tax purposes, the report said. This means that income derived from mining activities will be taxed based on its market value at the time of receipt. However, miners will be allowed to deduct expenses related to mining operations from their taxable income.
Furthermore, crypto transactions are set to be exempt from value-added tax, where income from trading will be subject to the same tax rates as income from securities transactions, with a maximum personal income tax rate of 15%.
The amendments plan to ensure compliance by requiring mining operators to report information on the individuals using their infrastructure.
Russia’s Finance Ministry reportedly explained that the decision to tax the financial income derived from mining aims to strike a balance between the interests of businesses and the government.
The country first introduced the original bill on cryptocurrency taxation in December 2020 and passed its first reading in 2021, according to Interfax.
Russia's Federal Tax Service proposed last month to tax miners' unrealized gains. Earlier this month, the Russian government set a limit for unregistered individuals to mine bitcoin with a monthly power consumption of no more than 6,000 kilowatt-hours.
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