Russia’s Crypto Mining Leaders and Lawmakers Discuss Taxes, Cross-Border Settlements, and Legislation

Key Takeaways

• Russia’s mining industry recently met to discuss crypto mining regulations.
• The country’s Federal Tax Service wants to introduce a “two-stage” tax system on Russian crypto miners.
• Russia is quickly warming to the crypto industry.

Russian officials and business leaders recently gathered at the Industrial Mining Association’s (IMA) first forum to discuss crypto mining regulations, exploring thorny issues from trade policy to taxation as the sector’s rapid growth shows no signs of slowing.

Tax on Mining

According to local media sources , 70% of Russia’s crypto mining industry capacity participated in the meeting.

One of the highlights of the meeting was the Federal Tax Service’s (FTS) two-stage tax proposal for Russian crypto miners.

Under the proposed framework, in the first stage, miners would face an initial tax payment on their mined coins as soon as they enter their digital wallets.

In the second stage, the FTS aims to impose another tax payment or deduction of losses when miners sell or transfer the mined crypto, depending on its sale value.

While the FTS has outlined the basic structure, Alexey Katyayev, head of the FTS’ inter-regional inspectorate, emphasized that a final decision has yet to be made.

In another important clarification, Katyayev noted that crypto mining would be exempt from value-added tax (VAT), as the mined coins are not intended for domestic use.

However, individual miners would still be required to pay personal income tax on their profits.

Mined Crypto in Foreign Trade

Cross-border payments using mined crypto were also reportedly a point of contention at the IMA meeting.

The Central Bank of the Russian Federation recently announced it was working on integrating crypto into Russia’s financial system for foreign payments.

The new experimental infrastructure will allow approved businesses and entities in Russia to use crypto to settle overseas settlements.

However, some IMA officials argued that the volume of domestic mining would not cover all of the needs for foreign activity – and other digital financial assets would be better to use.

Despite some mixed opinions on mined crypto’s use in overseas payments, officials and business executives unanimously agreed that all information about the experiment should remain private.

Anton Tkachev, Deputy Chairman of the State Duma Committee on Information Policy Anton, said it was imperative not to reveal the government’s “trump cards.”