On November 29, 2024, a federal law was signed introducing amendments to the Tax Code, regulating the taxation of income and expenses related to mining and cryptocurrency trading. The law also imposes additional tax control obligations on mining infrastructure operators (MIOs).
According to the law, the new rules will take effect on January 1, 2025. While value-added tax (VAT) will not be applied to cryptocurrency transactions, miners will be required to pay other taxes:
- Legal entities: corporate profit tax.
- Individuals: personal income tax (PIT).
The calculation of the tax base will differ for mining and trading (buying and selling cryptocurrency).
Key Provisions of the Law
1. Taxation of Income from Mining and Trading
- Mining income will be included in the general tax base and taxed at a progressive rate ranging from 13% to 22%.
- Trading income will be calculated separately and taxed at a rate of 13–15%.
- Expenses related to mining, such as the purchase of equipment and electricity, can be deducted when calculating taxes. Additionally, losses from cryptocurrency operations in previous periods can be offset.
2. Taxes for Legal Entities
- The taxable event for profit tax is defined as the receipt of cryptocurrency through mining or its sale.
- Mined cryptocurrency must be included in the tax base at its value at the time of receipt, with a mandatory adjustment upon its sale.
3. Determination of Cryptocurrency Exchange Rates
- The exchange rate of digital currencies will be based on data from foreign cryptocurrency exchanges with daily trading volumes exceeding RUB 100 million, provided the exchange has published quotations for more than three years.
- The "closing price" method, similar to that used for securities exchanges, will be applied. For exchanges operating daily, the trading day will be treated as equivalent to the calendar day.
4. Obligations of Mining Infrastructure Operators (MIOs)
- MIOs will be required to provide tax authorities with information about their miner clients.
- Details regarding the information to be provided are yet to be clarified and require additional guidance.
5. Exclusion of Special Tax Regimes
- Miners will not be allowed to use simplified taxation systems (STS), patents, or other special tax regimes. Income from mining and trading for individuals will also not fall under self-employment taxation.
6. Foreign Digital Rights (FDRs)
- The law mentions FDRs, such as stablecoins, suggesting the possibility of certain tokens being used within Russia if they meet the requirements for digital financial assets (DFAs).
Nadmitov, Ivanov & Partners offers consultations on digital and information law, technology regulation, electronic services, fintech, personal data protection, and cryptocurrency transactions.
Email: info@nplaw.ru
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