The Russian government has officially approved a new taxation framework for cryptocurrencies as it moves towards regulation, usage, and innovation in the country.
The legislation classifies cryptocurrencies as “property” for taxation purposes and introduces measures to regulate income from mining and trading activities. The framework also seeks to strike a balance between encouraging innovation and ensuring state oversight.
Under this framework, individuals earning up to 2.4 million rubles ($22,300) annually from cryptocurrency activities will face a 13% income tax, while higher earnings will be taxed at 15%. Cryptocurrency mining is also covered, with mined assets taxed based on their market value at the time they are received.
Miners can deduct costs related to electricity and equipment depreciation. However, the government has decided to exempt cryptocurrency transactions from value-added tax (VAT), a move seen as an incentive for the growing digital economy.
The law requires crypto miners and infrastructure operators to report their activities to the Federal Tax Service, with non-compliance potentially resulting in fines.
Russia’s approach to cryptocurrencies has evolved significantly over the past years. Initially, the government viewed digital currencies with suspicion, considering outright bans due to their potential use in illegal activities.
However, as the global interest in blockchain technology grew, Russia began recognizing its transformative potential, even if cryptocurrencies themselves were tightly regulated. By the early 2020s, the country started integrating cryptocurrencies into its financial system, particularly as sanctions restricted its access to traditional international financial networks.
In 2023, the government permitted the use of cryptocurrencies for international settlements, signaling a strategic shift toward leveraging digital assets to bypass economic constraints.
This latest move follows the legalization of cryptocurrency mining earlier in 2024 and reflects a broader effort by Russia to position itself as a key player in the global crypto market.
In early August, Russian President Vladimir Putin signed a law legalizing cryptocurrency mining nationwide. This regulation creates a legal framework for cryptocurrency extraction within Russia’s borders.
The introduction of a clear tax framework is seen as a critical step to encourage innovation while ensuring regulatory compliance. Within the BRICS bloc, this decision aligns with ongoing efforts to reduce reliance on the U.S. dollar and foster alternative payment systems.
