MOSCOW: In a landmark decision, Russian President Vladimir Putin has signed a law that not only recognizes cryptocurrencies as legitimate property within the country but also introduces significant tax reforms for crypto activities.
Under the new legislation, cryptocurrency mining and sales transactions are exempt from Value Added Tax (VAT), marking a significant shift in Russia’s approach to digital currencies. However, this freedom comes with regulatory oversight; mining operators are now required to report their clients or face a penalty of 40,000 rubles, approximately $400.
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For individuals engaged in crypto trading, personal income derived from these activities will be taxed at a rate of 13% for earnings up to 2.4 million rubles, with a higher rate of 15% applied to income exceeding this threshold. On the corporate side, profits from cryptocurrency mining will be subject to a 25% tax starting from 2025, aligning with corporate tax standards.
This move by Putin is seen as an attempt to legitimize and regulate the burgeoning crypto sector in Russia, potentially positioning the nation as a more crypto-friendly jurisdiction amidst global regulatory uncertainty. The law aims to foster innovation in digital assets while ensuring that the government can monitor and control the crypto market to prevent illicit activities. This legislative change could significantly influence Russia’s economic landscape and its role in the global cryptocurrency market.
