Russian lawmakers have approved a landmark crypto tax bill, imposing levies on Bitcoin miners’ revenues. The State Duma passed amendments to the Russian Tax Code, paving the way for the country’s industrial crypto mining sector to face taxation for the first time.
Crypto Taxation: Putin’s Signature Imminent?
The bill, now set for Senate approval, will require President Vladimir Putin’s signature to become law. Given the swift actions in the Duma, both steps are expected to be completed soon.
- Tax Rates for Miners:
- Miners earning up to 2.4 million rubles (~$21,210) annually will pay a 13% flat tax.
- For revenues exceeding this threshold, a 15% tax rate will apply.
- Legal Recognition of Crypto: For the first time, the bill legally defines crypto as a form of “property”, addressing a long-standing challenge in Russian courts that previously struggled to classify blockchain-based tokens.
- VAT Exemption: Miners will be exempt from value-added tax (VAT) when mining and selling tokens on exchanges. However, they must report operations to the Federal Tax Service (FTS) or face penalties of up to 40,000 rubles (~$354).
Accelerated Legislative Rollout
Russia has fast-tracked crypto-related regulations in recent months. In August 2024, Putin signed the nation’s first crypto mining legalization law, which came into effect on November 1.
The government has since taken further steps to regulate the industry, including restricting mining in regions with winter energy shortages. The FTS has reported that 150 firms have already applied for mining permits, with many more expected to follow.
Rising Demand for Mining Hardware
Russia’s mining sector has seen a surge in activity:
- Mining Hardware Demand:
- Earlier this year, weekly sales averaged 30 rigs, but by September, the figure rose to 200.
- In November, this spiked to 600 rigs per week, driving prices up by 10%-15%.
- Profitability: Mining remains profitable despite rising costs. In regions like Irkutsk, Russia’s Bitcoin mining hub, mining costs are among the lowest, at $35,000 per Bitcoin, compared to the national average of $40,000. However, illegal mining in Irkutsk has strained the local Siberian power grid.
A Milestone for Russia’s Crypto Industry
The introduction of clear tax obligations and property recognition for crypto marks a significant step in Russia’s evolving stance on digital assets. This development aligns with the country’s broader efforts to formalize its crypto sector and balance economic innovation with regulatory oversight.
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