In a major move towards successful domestic digital asset regulation, Russian President Vladimir Putin has created a new legal framework to tax Bitcoin mining and transactions, recognizing them as property and making them formal Signed legislation to prepare for taxation.
Russia’s new Bitcoin and virtual currency tax law
Digital currencies, including Bitcoin, will be classified as property under the new law, according to local media reports. This classification also applies to currencies used for foreign trade settlements within the framework of the Experimental Regime in Digital Innovation (EPR).
In particular, the law provides that the mining and sale of digital currencies will be exempt from value added tax (VAT), which could encourage further investment and participation in the cryptocurrency market.
One of the key provisions of this law requires mining infrastructure operators to report to tax authorities regarding users of virtual currency issuance services. Failure to provide this information promptly may result in a fine of 40,000 rubles ($380).
Regarding income tax implications, virtual currency obtained through mining is classified as “income in kind.” The term is typically used to describe non-cash payments made in the form of goods or services.
The value of mined cryptocurrencies is determined based on prevailing market rates. This income is subject to progressive taxation and allows for deductions related to mining costs.
Tax rate 25% from 2025
The law also outlines a two-tier tax regime for income derived from the acquisition, sale, or other forms of distribution of virtual currencies.
Income up to 2.4 million rubles ($22,600) is taxed at 13%, and income above this threshold is taxed at 15%. These incomes are included in the same tax base as income from securities, bank deposits, and other sources.
Companies engaged in Bitcoin mining will be subject to a standard income tax rate of 25% from 2025. However, the law limits the tax regimes available to organizations and individual entrepreneurs (IPs) involved in cryptocurrency activities.
Specifically, these entities will not be allowed to adopt a single agricultural tax, use a simplified tax system, or benefit from an “automatic simplified tax system”. Neither the patent system nor the self-employment system applies to Bitcoin mining or trading.
The law will come into force upon official publication, but certain provisions will apply on a different schedule. It also includes transitional provisions to facilitate implementation of these regulations.
The daily chart shows BTC price recovery. Source: BTCUSDT on TradingView.com
At the time of writing, the major cryptocurrency is trading at $98,500 after a temporary correction of 7% earlier this week, inching closer to its all-time high of $99,500.
Featured image from DALL-E, chart from TradingView.com
