In a significant move, Russia is poised to implement regulatory measures for taxing cryptocurrency profits. The Ministry of Finance has drafted new guidelines that propose a flat tax rate of 15% on earnings derived from both cryptocurrency mining and trading, as reported by local news agency Interfax.
How Will Cryptocurrencies Be Classified?
Under the proposed regulations, cryptocurrencies will be regarded as “property” for tax purposes. This classification means that income earned from mining activities will be taxed based on its market value. However, miners can deduct their operational costs, leading to taxation only on net profits.
What Restrictions Will Miners Face?
In addition to the tax framework, Russia is set to impose tighter restrictions on mining operations. A recent proposal from the Federal Tax Service aims to tax unrealized gains for miners. Furthermore, there will be a cap on electricity usage, limiting individual miners to 6,000 kilowatt-hours per month.
Originally introduced in 2020 and having passed its initial vote in 2021, these amendments are designed to regulate the cryptocurrency landscape effectively while boosting state revenue. Key takeaways include:
- 15% tax rate on cryptocurrency earnings.
- Mining categorized as property with deductibility of expenses.
- Exemption of cryptocurrency transactions from value-added tax.
- Limitations on electricity consumption for individual miners.
With these measures, Russia aims to enhance its control over the cryptocurrency market. Investors are attentively observing how these regulations will develop and impact their operations in the coming months.