Russia Approves Digital Currency Tax Framework

According to PANews, Russia's upper house of parliament has approved a government-initiated bill outlining a tax framework for digital currencies. This development follows the bill's initial approval in the State Duma, the lower house, and its final passage in a plenary session on Wednesday. The new law classifies digital currencies, including those used as payment tools under experimental legal frameworks, as property under the Russian Federation Tax Code. This classification exempts digital currency mining and sales transactions from value-added tax (VAT), easing the financial burden on participants in this sector. Additionally, services provided by authorized organizations facilitating transactions under these experimental frameworks will also be exempt from VAT. A significant provision of the law requires mining infrastructure operators to report personal data of individuals using their systems to tax authorities. Income from digital currency mining will be considered taxable income, forming the basis for personal income tax. According to Danil Volkov, a relevant department head at the Russian Ministry of Finance, businesses engaged in mining activities will be taxed at the standard corporate income tax rate. The law stipulates that mining income will be taxed based on the asset value on international exchanges. For most digital currency earners, the personal income tax rate will remain at 13%, with an increase to 15% for annual incomes exceeding 2.4 million rubles starting in 2025. During the legislative process, the bill underwent multiple readings in the State Duma, required approval from the Federation Council, and awaits the president's signature to become law. With anticipated support from President Putin, this legislation is set to formally establish a detailed tax framework for digital currencies in Russia.