The Russian government has reportedly approved some draft changes to a crypto tax bill which proposes to levy a 15% tax on income from crypto trading. The bill is focused on taxing income and expenses from crypto transactions and mining.
According to the proposed bill, cryptos will be categorized as ‘a property’ for tax purposes. Thus, any income earned from crypto mining will be taxed depending on its market value at the time of receipt. Russian news agency Interfax also reported that miners, however, will be permitted to reduce expenses related to mining operations from their taxable income.
It has been reported that crypto transactions will be exempted from value-added tax, where the tax on income earned from crypto trading will be the same as tax on income from securities transactions, with a maximum personal income tax rate of 15%.
The draft amendments also wants to tighten compliance norms which implies mining operators need to report information on the individuals using their infrastructure.
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“As a result of discussions with businesses, a decision was made on the advisability of taxing the financial result from mining as the fairest reflection of the results of this activity. This approach is aimed at observing a balance between the interests of businesses and the state,” the Finance Ministry said.
The original bill on cryptocurrency taxation was first introduced in December 2020 and passed its first reading in 2021.
Last month, Russia’s Federal Tax Service had proposed last month to tax miners’ unrealized gains.
As per a report, Russian industry experts expect industrial-scale crypto mining to generate approximately $700 million in tax revenue annually. With a 15% crypto tax in place, the Russian government aims to solidify its position as the global leader in crypto mining. Conversely, another major global power, the US, imposes an income tax of up to 37% on mining rewards, along with a capital gains tax of up to 20% on any profits derived from selling those rewards.
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