Putin signs new cryptocurrency law, deeming Bitcoin an “asset”
Russian President Vladimir Putin signed a new law on Friday (29th), officially recognizing digital currencies as assets and applying to the experimental legal framework (ELR) for cross-border trade settlement. This is Putin’s latest action after signing encryption mining regulations in August to further improve regulations for the Russian cryptocurrency industry.
It was read out several times in the State Duma (Russian parliament), approved by the Federation Council, and signed by the President. Backed by Putin, the legislation would formally create a comprehensive tax framework for Russian digital currencies.
In December 2020, Russia first proposed a preliminary bill on cryptocurrency taxation, which will be reviewed for the first time in 2021. As we reported last month, Russia’s Federal Tax Service proposed taxing miners on their unrealized gains. In addition, the Russian government has set limits for unregistered individual miners, stipulating that their monthly electricity consumption must not exceed 6,000 kilowatt hours.
Mining income is considered "in-kind income" and is taxed according to market value, allowing deduction of blockchain mining costs. By law, cryptocurrency mining and trading activities are exempt from value-added tax (VAT), and crypto transactions conducted within the ELR framework also enjoy tax exemptions. However, operators of mining facilities are required to report user information to the tax authorities. Failure to submit on time will result in a fine of 40,000 rubles (approximately NT$12,300).
Personal income tax on buying, selling or trading cryptocurrency adopts graded tax rates, with 13% applicable for income below 2.4 million rubles (approximately NT$736,000), and 15% applicable for income exceeding 2.4 million rubles (approximately NT$736,000). Enterprises’ mining profits will be taxed at a 25% corporate tax rate from 2025.
In addition, individuals or companies engaged in crypto-related activities are not allowed to enjoy the simplified tax system or agricultural tax concessions, nor are they subject to the patent system or the self-employed status tax system. The law has taken effect immediately, but some provisions have specific implementation timetables and provide transitional measures to assist adaptation. .
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