The Russian government has approved a Cryptocurrency Taxation Bill that exempts value-added tax and treats exchange as part of securities income.

According to reports, the Russian Ministry of Finance has approved a draft amendment to the law on taxation of Cryptocurrency transactions and Mining income. Highlights include exemption from value-added tax on Cryptocurrency transactions, as well as inclusion of Cryptocurrency transaction income and securities transaction income in the same tax base. The maximum personal income tax rate in this regard does not exceed 15%, compared to the rates as high as 40% in countries such as Japan and Italy, it is already evident that the Russian government holds a more relaxed regulatory position towards Cryptocurrency.

Russian Ministry of Finance sets: Crypto Assets are subject to a maximum of 15% income tax

In this version of the draft, Cryptocurrency is defined as a form of property. Income from Mining Cryptocurrency will be calculated based on its market value, but mining-related expenses can be deducted from that income. Cryptocurrency transactions are exempt from value-added tax, and Cryptocurrency trading income will be included in the same tax base as securities trading income. This means that the maximum tax rate for individual income tax on Cryptocurrency will not exceed 15%.

In addition, the amendment also requires mining operators to submit personal information reports on the use of their infrastructure to ensure the compliance of the mining site.

The Russian government first submitted the Cryptocurrency Taxation Bill (No. 1065710-7) to the parliament in December 2020, which was passed on first reading in 2021.

The country's Ministry of Finance also stated: "After discussing with the enterprises, we believe that taxing the financial situation of Mining Farm is the fairest decision. This bill can maintain a balance between the interests of the enterprises and the country."

FTS Second-tier Taxation Law: Taxation starts from depositing into Address, and taxation will be levied according to the situation during transactions.

It is worth mentioning that the federal tax service previously took tax actions on the unrealized income of mining industry. However, the key points including not levying value-added tax and disclosing the identity of Mining Farm employees continue to the new amendment. At that time, the federal tax service believed that there was no need to introduce special systems in the mining industry. Alexey Katyaev, head of the seventh largest taxpayer regional inspection of the federal tax service (FTS), said: "For companies, traditional income tax will be levied, and for individuals, personal income tax will be levied."

At that time, the Federal Tax Bureau proposed to regulate the encryption industry through a classical two-stage taxation system. The first stage is to start taxing when Cryptocurrency is transferred to a registered address for taxation purposes, which the Federal Tax Bureau refers to as a prepayment for mining Cryptocurrency.

The second paragraph of the tax rate is taxed when the trading behavior occurs. For example, if the price of the coin has risen since the first tax payment, the company will pay tax on the profit. But if the price falls, the price difference needs to be treated as a loss.

This article Russia's government approved the Cryptocurrency Tax Act, exempting VAT and merging exchange into securities income first appeared on Chain News ABMedia.