Russia Declares Bitcoin as Property, Exempts Crypto from VAT in New Tax Law

Russia’s law classifies Bitcoin as property and exempts cryptocurrency from VAT.

Cryptocurrency mining will face new tax rates, starting at 13% for personal income.

Mining firms must report user data to authorities under stricter compliance rules.

Russian President Vladimir Putin has signed a law officially recognizing Bitcoin and other cryptocurrencies as property under the nation’s tax code. This legislation introduces a taxation framework for digital assets while exempting cryptocurrency sales and mining activities from value-added tax (VAT)

The legislation classifies crypto assets like Bitcoin as taxable property, setting clear tax obligations for individuals and businesses involved in the sector. Notably, mining income will be taxed as personal income at a rate of 13%, with an increase to 15% for annual incomes exceeding 2.4 million rubles, or approximately $28,800, starting in 2025.

The law also tightens compliance measures for crypto mining firms. Companies engaged in mining activities are now required to report user data to authorities, ensuring greater oversight in the sector. This regulatory move seeks to establish a transparent framework for mining operations, which have expanded significantly in Russia in recent years.

Additionally, only registered Russian legal entities or individual entrepreneurs may participate in cryptocurrency mining. However, individual miners are exempt from this registration requirement if their energy consumption remains within government-defined limits.

This regulatory development follows Russia’s ongoing trials to incorporate cryptocurrency into cross-border transactions. The trials, launched in September, involve the use of the National Payment Card to facilitate exchanges between rubles and digital currencies.

The initiative seeks to address financial challenges faced by Russian businesses amid international sanctions, which have increasingly restricted traditional payment channels.

Legalizing cryptocurrency mining, signed into law earlier this year, allows foreign digital financial assets to be traded on Russian platforms. However, the Bank of Russia retains authority to restrict listings that may threaten the country’s financial stability.

The move is part of broader efforts to create a supportive environment for digital assets while safeguarding economic stability.