Russian Industrial Mining Association Proposes Taxation Model for Cryptocurrency Mining

Sergey Bezdelov, head of the Russian Industrial Mining Association, has announced that the organization is in discussions with the Federal Tax Service regarding the taxation methodology for cryptocurrency mining. The proposed model involves taxing cryptocurrency upon arrival in a wallet and again when it is withdrawn, especially if there is income from exchange rate differences, according to Kommersant.

Bezdelov explained that all wallets hosted by major mining operations will be registered and validated with the tax authorities. Taxes will be paid immediately when Bitcoin is received in these wallets. Additionally, when miners withdraw Bitcoin to their own accounts and if the value has increased, an additional tax will be levied.

“Tax is paid immediately when Bitcoin is received, and when it is withdrawn, if the value has increased, there is an additional payment,” said Bezdelov at the PLAS-forum Uzbekistan Digital, as quoted by RIA Novosti.

He added that Russia is currently second in the world in terms of cryptocurrency mining volume and first in the industry’s growth rate. However, he noted that full regulation of the sector is still under discussion.

Earlier in June, the Ministry of Finance expressed support for assigning a specific code for mining in the All-Russian Classifier of Economic Activities. In 2022, a bill to regulate the procedure for mining digital currencies and their subsequent sale was submitted to the State Duma. This bill aims to bring mining into the legal framework but has not yet been adopted. The Ministry of Energy also supports the legalization of mining.

The proposed taxation model and ongoing regulatory discussions indicate Russia’s efforts to formalize and regulate the rapidly growing cryptocurrency mining industry.