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Key Takeaways

Putin signed a law recognizing digital assets as property and introducing new tax frameworks for crypto mining.
Crypto mining is exempted from VAT, but operators must report clients to tax authorities or face fines.

Russian President Vladimir Putin has signed a new law that officially recognizes digital currencies as a form of property when used in foreign trade settlements. The regulations also exempt crypto mining and sales from value-added tax (VAT), TASS reported Friday.

The law is placed under an experimental legal regime (ELR)—a framework that allows for the testing and implementation of digital currency transactions. With this legislative move, Russia aims to establish regulations for the taxation of digital currencies in the country.

The law introduces specific reporting requirements for mining infrastructure operators. Operators who fail to report their clients to the tax authorities face fines of 40,000 rubles.

Mining income will be classified as “income in kind” and taxed according to market rates, with deductions allowed for mining expenses. Income from crypto trading will follow a two-tier personal tax structure – 13% for earnings up to 2.4 million rubles and 15% for amounts exceeding that threshold.

For corporate entities, crypto mining profits will be subject to the standard corporate tax rate of 25% starting in 2025.

The legislation bars crypto miners and traders from accessing several preferential tax regimes, including simplified taxation systems, agricultural tax benefits, and self-employed status. They cannot utilize the patent system or automated simplified taxation.

The law will enter into force on the day of its official publication, with the exception of provisions for which other terms are established,” according to the published document, which notes that certain transitional provisions are included.

The move comes after Putin signed a law that defines and advances crypto mining regulations in August. The law allows only registered entities to perform large-scale operations.

This is a developing story.