The Russian government approved a set of amendments to a bill that proposes applying taxes to income and expenses from Bitcoin (BTC) transactions and Mining, in some cases recognizing them as commodities.
According to the information spread by the Ministry of Finance, the government of Vladimir Putin agreed to make a series of changes to a proposal submitted in 2020 and approved by the State Duma in 2021. This is the draft law on taxation of digital currencies (No. 1065710-7) which is currently undergoing final evaluations by the State Duma.
The Ministry of Finance decided to add new rules to the project to include rules on the taxation of income from the purchase and sale of cryptocurrenciesincome and expenses for the Cryptocurrency miningand the responsibilities of mining infrastructure operators.
“As a result of discussions with the business community, the decision was made to tax the financial result of (cryptocurrency) mining as the fairest reflection of the results of this activity. This approach aims to balance the interests of companies and the State.”
Ministry of Finance.
The idea with this bill is to take cryptocurrency trading and miners’ operations out of the gray zone, after bitcoin mining remain legally recognized in Russia after the entry into force of a new law this November 1.
New rules are coming for Bitcoin miners
The amendments approved by Finance include specific criteria that miners must follow, determining that operators They will have to report to the tax authorities data on people who mine cryptocurrencies using State infrastructure.
In that sense, bitcoin is recognized as a commodity for tax purposes. This means that the tax consequences of holding cryptocurrencies will be the same as for real estate purchase and sale transactions.
Consequently, the income obtained as a result of the Bitcoin mining They will also be taken into account as commodities or property, “as they are received for the amount of their market value.” The amount of this income can be reduced taking into account the expenses incurred during the mining process.
The Ministry of Finance’s proposal thus proposes the insertion of a new article in the bill, to specify how to evaluate taxable income derived from mining. It is stipulated that these operators must comply for the contributions of the exchanges to determine your tax obligationswith a 25% tax rate that will take effect in 2025.
The calculation will be based on the market price of the digital currency on the date of receipt of the proceeds. This market value will be defined as the closing price established by the exchanges, provided they have a volume daily exceeding 100 billion rubles and have published market quotes on their official website for at least three years.
However, the same tax base will be applied to income from transactions with digital currencies as income for securities transactions (security). In this way, the personal income tax when taxing cryptocurrencies will not exceed 15%. Additionally, the regulation establishes that transactions with cryptocurrencies will not be subject to VAT.
As CriptoNoticias has reported, with all these requirements that the government is imposing to carry out mining in Russia, the activity will basically be under state controlwhich even will have the power to prohibit mining in certain regions if it deems appropriate. Hence, it is still difficult to establish whether the legalization of mining in Russia will be conducive to the industry.
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