Russia Passes Tax Law on Cryptocurrency Transactions Amid BTC Boom
President Vladimir Putin’s government is moving quickly to regulate the crypto sector amid Bitcoin’s historic boom. In a recent development, the Federation Council, Russia’s upper house of Parliament, approved a bill outlining the tax framework for crypto assets. Putin has long sought to reduce Russia’s dependence on the US dollar for international transactions, and instruments such as CBDCs and cryptocurrencies are seen as key to achieving this goal.
Under this bill, Russia has classified virtual digital currencies as property and introduced a 13 to 15 percent tax on crypto sales that generate personal income, a Cointelegraph report citing information from the official document noted.
To position Russia as a crypto mining hub, the government has exempted crypto miners from value added tax (VAT) on mined cryptocurrencies. Miners are required to comply with government regulations and report necessary information to local authorities. Violations of these guidelines may result in a fine of RUB 40,000 (approximately Rs. 30,754).
The bill has undergone three readings by the Russian legislature and is awaiting President Putin’s signature before becoming law. The timetable for its completion remains unclear.
The move follows the election of Donald Trump as the 47th President of the United States, after which Bitcoin rose to an all-time high of almost $100,000 (approximately Rs. 84.4 lakh).
President Putin appears to believe that virtual digital assets (VDAs) such as Bitcoin can help Russia’s economic recovery following the sanctions imposed by several countries following the invasion of Ukraine in February 2022.
Since the beginning of this year, Russia has taken several steps to regulate the virtual digital assets sector.
In March, Russia joined Brazil, China and South Africa – the BRICS group – in planning a digital payments network backed by digital currencies. Recently, President Putin expressed his support for this initiative, emphasizing that digital currencies could benefit not only the BRICS countries, but also other developing economies.
In July this year, President Putin signed the Digital Ruble Law to help Russian citizens process payments through the Digital Ruble CBDC.
