Cryptocurrency mined in Russia to be taxed based on prices on foreign exchanges - source
MOSCOW. Nov 20 (Interfax) - Russia's Finance Ministry has worked out requirements for foreign cryptocurrency exchanges whose market quotes Russian crypto miners will be able to use to determine the value of their mined cryptocurrency for paying taxes.
The ministry drafted the relevant amendments for the second reading of the bill on taxation of digital currencies (No. 1065710-7), a source told Interfax. Crypto mining is legal in Russia, but trading cryptocurrencies is not, so there are no domestic crypto exchanges.
The ministry's proposed changes determine the criteria for foreign exchanges whose quotes miners are supposed to use to calculate their profit tax, which will be 25% starting in 2025. The amendment will introduce a new article (282.3) into the Tax Code that will spell out the particulars for determining the tax base for transactions with digital currency obtained as a result of mining.
The tax base will be calculated based on the market quote of the digital currency on the date the income is received. The market quote will be defined as the closing price set by a foreign trading organizer, including an exchange, on transactions for the day, the bill states.
A foreign trading organizer (including exchange) will be defined as an entity whose digital currency trading volume exceeds 100 billion rubles per day. Information on market quotes for cryptocurrencies must have been posted on the exchange's official website for the past three years.
If transactions with the same digital currency were conducted through two or more foreign crypto exchanges, the taxpayer will be able to independently choose a market quote on one of them.
Income (revenue) from the sale of digital currency will be determined based on the actual realized price, but not less than the market quote reduced by 20%.
The bill also includes responsibilities of mining infrastructure operators related to tax control. Such operators will have to report information to the tax authorities about digital currency mining by persons to whom they provide mining infrastructure services. This information will have to be reported quarterly in electronic form.
Data from CoinMarketCap, which ranks and assesses crypto exchanges based on traffic, liquidity and trading volume, shows that Binance ranks first by trading volume with 3.288 trillion rubles in the past 24 hours. Bybit is a distant second with 729 billion rubles, followed by OKX with 585 billion rubles, Coinbase Exchange with 583 billion rubles, Huobi with 300 billion rubles and Kraken with 190 billion rubles. All these exchanges have published trading data for more than three years.
The law on cryptocurrency mining, which was passed by parliament at the end of July, brings digital currency mining into the legal plane. Cryptocurrency mining is the process of creating new digital coins by confirming transactions in a blockchain using computing and energy-intensive resources. Successful miners are rewarded in the form of cryptocurrency for confirming transactions.
