Russia is ready to introduce a 15% tax on all cryptocurrency mining and trading activities. The move aims to create a regulatory framework to support the growing digital asset industry.
15% tax on cryptocurrency trading and mining activities
According to Interfax, the Russian government did this approved draft amendments to the Act on taxation of income and expenses from mining and trading in digital assets. It is worth noting that the Ministry of Finance is working on the classification of digital assets as property for tax reporting purposes.
Under the proposed changes, income generated from mining and trading digital assets will be taxed at a rate of 15%. This initiative aims to establish a fair and business-friendly tax system for the growing cryptocurrency industry.
For miners, the tax base will be determined based on the market value of the underlying digital asset at the time of receipt. Additionally, miners can deduct expenses incurred in the course of their activities from their taxable income.
It is worth emphasizing that transactions on digital assets will be exempt from value added tax (VAT). Instead, income from cryptocurrency transactions will be treated similarly to income from securities transactions. As a result, the maximum individual tax liability for digital asset transactions will not exceed 15%.
Operators of digital mining infrastructure must also inform tax authorities about miners. The Russian Ministry of Finance explained:
As a result of talks with entrepreneurs, a decision was made on the advisability of taxing the financial result from mining, as the most correct reflection of the results of this activity. This approach aims to maintain a balance between the interests of enterprises and the state.
How does this relate to global taxes on digital assets?
Russia’s proposed tax rate of 15% is relatively moderate compared to digital asset taxation policies in other countries. For example, in 2022 India introduced a flat 30% tax on any profits from trading or selling cryptocurrencies and 1% withholding tax (TDS) on transactions exceeding $590 per year.
Most recently in Europe, Italy corrected its earlier plan to impose a 46% tax on capital gains from cryptocurrencies. The country is currently considering a reduced tax rate of 28% so as not to stifle the growing crypto ecosystem.
A more radical approach to taxes on virtual assets has been observed in Denmark. The Danish government does was speculated introduce a 42% tax rate on unrealized profits from cryptocurrencies from 2026.
Another European country, the Netherlands, is taking a more balanced approach to the taxation of virtual assets. Recently the Dutch government he stated asks the public to provide feedback on the proposed tax policy before its implementation.
Meanwhile, newly elected US President Donald Trump announced plans to make the country the “crypto capital of the world.” Trump has proposed to remove all capital gains taxes on Bitcoin (BTC) transactions used for purchases.
The United Arab Emirates has removed Middle East VAT on all cryptocurrency transactions and conversions, further cementing its reputation as a cryptocurrency-friendly jurisdiction. At press time, BTC was trading at $92,488, up 2.2% in the last 24 hours.
Featured image from Unsplash.com, chart from TradingView.com
