Russia introduces tax on crypto mining

Russian President Vladimir Putin has signed a new federal law regulating crypto mining and granting legal recognition to digital currencies as property. The law, which will take effect on January 1, 2025, introduces a personal income tax of 13% to 15% on cryptocurrency sales, with mining operations exempt from value-added tax (VAT). It also mandates that mining infrastructure operators report their services to local authorities every quarter, with penalties for late submissions.

The legislation also recognises digital currencies as property, granting them legal status and allowing their use in cross-border transactions under Russia’s experimental legal regime. Crypto miners will be taxed progressively based on income, with a 13% rate on earnings up to 2.4 million rubles and 15% on income above that threshold. However, corporate profits from mining activities will face a higher tax rate of 25% from 2025 onwards.

Alongside the tax changes, Russia’s ongoing energy crisis has led to restrictions on mining activities in energy-scarce regions. Certain areas, such as Irkutsk and Donetsk, may face mining limits until 2031, which could have a significant impact on mining companies relying on cheap energy sources.

This regulatory clarity has contributed to a rise in demand for cryptocurrencies, reflected by an 8% increase in traffic to major exchanges in November. However, the energy-intensive nature of mining and regional restrictions remain key challenges for the industry.