Russian govt approves changes to bill on taxation of cryptocurrency transactions

MOSCOW. Nov 18 (Interfax) - The Russian government has approved draft amendments to the bill on taxation of income and expenditures from mining of digital currency and its purchase and sale, the Finance Ministry reported.

Digital currency will be defined as property for the purposes of taxation. Income in the form of digital currency received as a result of mining will be counted as it is received in the amount of its market value. However, it will be possible to deduct expenses incurred in connection with mining from this income.

Transactions with digital currency will not be subject to value-added tax. Income from transactions with digital currency will be counted in the same tax base as income from transactions with securities. Thus, the maximum personal income tax rate in taxation of cryptocurrencies will not exceed 15%.

Operators of mining infrastructure will have to report information about persons mining cryptocurrency using their infrastructure to the tax authorities.

"As a result of discussions with businesses, a decision was made on the advisability of taxing the financial result from mining as the fairest reflection of the results of this activity. This approach is aimed at observing a balance between the interests of businesses and the state," the Finance Ministry said.

The government submitted the bill on taxation of digital currencies (No. 1065710-7) to parliament in December 2020 and it was passed in the first reading in 2021.