Yigit Taha OZTURK 
Russia, on November 11, approved a bill introducing a comprehensive cryptocurrency taxation framework. The new regulations classify cryptocurrency as property and impose taxes on mining activities under both personal income tax and corporate profit tax systems. It also allows small-scale mining without registration under certain energy limits.
The law, originally drafted in 2020, had been delayed until now. It aligns with the new mining regulations that took effect on November 1, offering a two-stage taxation system for cryptocurrency operations.
How Will the Taxation System Work?
The new law classifies cryptocurrency as property, subjecting both individuals and companies engaged in mining to taxation. Companies must register with the Federal Tax Service to operate legally, while individual miners can mine without registration, provided their monthly electricity consumption does not exceed 6,000 kWh, roughly six times the average household consumption in Russia.
The mining tax system is structured in two stages. In Stage 1, companies will pay taxes when cryptocurrency is deposited into their wallets. The tax base will be calculated based on the closing prices from major exchanges, with all foreign currencies converted to rubles at the Central Bank’s official rate.
In Stage 2, if the cryptocurrency is sold at a price higher than the initial taxed value, additional taxes will apply. If the price drops, these losses will be deductible. To prevent tax evasion, the law mandates a minimum taxable value of 80% of the market price, meaning taxation will apply to any bitcoin price appreciation between mining and selling.
Starting in 2024, individual traders and miners earning more than 2.4 million rubles annually will pay a progressive tax ranging from 13% to 22%. For companies, the corporate tax rate will rise to 25% in 2025. Companies can reduce their taxable base by documenting operational costs, such as electricity, mining equipment, maintenance, facility rentals, and staff salaries.
All activities related to mining and cryptocurrency trading will be subject to increased transparency. Tax authorities will have the power to review bank accounts related to cryptocurrency transactions if suspicious activities are detected. Mining infrastructure providers and mining pools must also report data to the tax authorities. Failure to comply will incur a fine of 40,000 rubles (417 USD).
No Tax on Electricity Consumption
One of the key features of the new tax framework is that it will not impose a tax based on electricity consumption. This decision rejected earlier proposals to implement excise taxes on electricity used in mining.
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Industry representatives, however, argue that cryptocurrency mining should only be taxed at the point of sale, not during mining, citing concerns over the investment attractiveness of the new tax structure.
With these new regulations, Russia aims to generate an additional 50 billion rubles (521 million USD) in tax revenue annually. However, the broader integration of cryptocurrency—particularly bitcoin—into the economy could yield even greater benefits than tax revenues alone.
Considering bitcoin’s global economic impact, the integration of cryptocurrencies into local economies could have strategic advantages, positioning countries at the forefront of the global financial transformation.
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