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Russia has passed a federal bill on the new tax legislation concerning the operations of cryptocurrencies. Adopted by the Federation Council, the upper chamber of the Russian parliament, on November 27, the legislation enshrines major steps to control and, as a consequence, to legalize and, possibly, to tax digital currencies.
The introduced law has set a income tax of 13-15% on the sales of cryptocurrencies in order to establish a base for people trading cryptocurrencies. For instance, it has been made clear that all mining activities of cryptocurrency are VAT-free. However, the regulation prescribes that mining operators report detailed information about their operations to the local authorities; failure to do this attracts fines of up to 40,000 rubles ($360) inclusive.
Getting this legislation passed comes at a time when trading Bitcoin was hitting record levels when each Bitcoin was trading for about 11 million rubles as shown by Coinbase. It increases awareness of cryptocurrencies in Russia and points to the fact that legislation and controls in the field are experiencing a high demand.
Apart from taxation, the legislation includes provisions that will prevent cryptocurrency mining in provinces with power constraints. Such regulations are meant to avoid an overload of local power grids as mining activities, inspired by the emergence of cryptocurrencies, are constantly growing.
The bill has been passed and is awaiting the seal of approval from President Vladimir Putin, and once signed the law kicks in. It is in line with attempts made by Russia of developing the sector of cryptocurrencies while ensuring that its economy and infrastructural development are not threatened.
The Russian government’s initial response to cryptocurrency is the new regulation on cryptocurrency taxes as well as the restrictions on mining. That is the goal of any competing state – to formalize and regulate all fields of public activity, including the taxation of the cryptocurrency market and addressing energy issues that, on the one hand, ensure the availability of profits from innovations, but on the other hand, can lead to negative consequences.
With Bitcoin’s remarkable performance against the ruble and the growing global focus on crypto regulations, Russia’s latest measures are poised to influence the future of digital assets within the country and beyond.
