Moscow, Wednesday, October 23, 2024 – Russia Federal Tax Service (FNS) has introduced a proposal to tax cryptocurrency miners on unrealized gains, potentially leading to miners paying taxes before selling their digital assets.
The plan includes a two-stage taxation system, with the first stage involving tax payments when miners receive cryptocurrency into their wallets.
According to FNS official Alexey Katyayev, this taxable event occurs when miners gain the ability to dispose of their mined assets, even if they have not transferred the coins to personal wallets.
In the second stage, miners will be taxed on the difference between the value of the cryptocurrency at the time of receiving it and the price when they sell or transfer it.
If the asset’s value rises, miners will be taxed on the profit, but if it decreases, they can claim a loss.
Katyayev also emphasized that cryptocurrency mining will not be subject to Value Added Tax (VAT) in Russia because crypto transactions lack legal monetary value in the country.
However, individual home miners will be required to pay personal income tax on their profits.
The proposal is part of Russia’s broader efforts to regulate the growing cryptocurrency mining industry. Major mining companies like Gazprom are expanding their operations, and industry insiders like BitRiver’s Deputy General Director Oleg Ogienko have expressed support for the tax, believing it will help create a more competitive and transparent sector.
Russian miners expect to collectively pay up to $616 million in taxes annually under the new rules.
