Russia Imposes 13-15% Tax on Crypto Sales, 25% Corporate Tax on Profits

Cryptocurrency is becoming increasingly popular in Russia, with individuals using digital coins like Bitcoin for swift payments and investments. The country ranked third globally in crypto mining last year, prompting the government to establish clear tax regulations. Understanding these taxes is crucial for Russians to stay compliant and avoid penalties. The Federal Tax Service (FTS) oversees crypto taxation, classifying it as property rather than cash. With new rules set to take effect this year, it is essential for Russians to grasp the basics to manage their digital assets legally.

The FTS, supported by the Ministry of Finance, is responsible for managing crypto taxes in Russia. The State Duma and Central Bank also play a role in setting regulations. A law signed by President Putin last November reclassified crypto as "property," updating the 2017 framework. The Tax Code now imposes taxes on miners twice and on sales once, starting from January 1. The FTS ensures that individuals and businesses pay taxes on their profits or earnings, with new guidelines enhancing reporting requirements. This regulatory framework aims to control Russia's growing crypto market and align with global trends.

In Russia, there are several types of crypto taxes. Income tax applies to profits from selling crypto and earnings from activities like mining or staking. Corporate tax is levied on businesses involved in mining or trading crypto, treating these activities as property income. Value-Added Tax (VAT) is not applicable to mining and sales on approved platforms, providing relief to users. Currently, there is no wealth or inheritance tax on crypto, but hidden assets face a 60% tax rate if discovered.

The income tax rate on crypto sales is 13% for earnings up to 2.4 million rubles and 15% for amounts exceeding this threshold. Businesses are subject to a 25% corporate tax on crypto profits, an increase from the previous 20% rate. Miners are taxed twice: once when the coins are mined based on market value and again when they are sold. Earnings below 50,000 rubles annually might avoid tax if unreported, but the rules are strict. The VAT exemption on mining and sales reduces costs by 18% on legal platforms.

Buying and selling crypto in Russia is tax-free when purchased with rubles, but profits from selling face a 13-15% tax. Crypto mining is taxed at market value when mined and again if sold at a higher price. When crypto is used as payment, it is taxed as income based on its ruble worth. Crypto-to-crypto trades are taxed as income if profits are realized. Earnings from DeFi and yield farming are considered taxable income, and profits from NFT sales are subject to income tax if sold for a gain.

Russians are required to report their crypto earnings to the FTS using Form 3-NDFL or corporate forms by April 30 each year. They must log trades with dates, amounts, and ruble values from platforms like Binance Russia. Miners must file monthly reports by the 20th online. Missing deadlines results in fines ranging from 5,000 to 40,000 rubles, plus 20% yearly interest. Repeat offenders risk jail after two missed filings in three years.

Crypto tax relief in Russia is limited. Miners can deduct proven costs like electricity from their income, but not from gains. Losses can only offset same-year crypto gains. Earnings below 50,000 rubles annually might avoid tax if unreported, but this is risky. VAT is exempt for mining and sales on approved platforms, saving 18%. Small miners using under 6,000 kWh monthly are exempt from registration. Regular traders face a heavy tax burden with few deductions.

The FTS employs blockchain and bank data to monitor crypto trades. Nineteen platforms, including EXMO, report deals over 600,000 rubles with Know Your Customer (KYC) verification. Common Reporting Standard (CRS) data helps identify overseas trades. Evaders face fines of 5,000 to 40,000 rubles, plus 20% interest. Hidden crypto assets are taxed at 60%, and repeat offenders risk jail. Peer-to-peer trades may sometimes go undetected, but FTS technology and global cooperation make hiding difficult. Miners missing monthly reports pay 40,000 rubles per missed filing. Compliance helps avoid swift penalties in Russia’s evolving crypto landscape.

Russia’s crypto tax regulations may undergo changes soon. The FTS is considering taxing all swaps or increasing rates to align with global trends. The government aims to foster crypto growth, potentially offering tax breaks for blockchain firms if job creation increases. VAT exemptions could be extended, maintaining Russia’s appeal for crypto activities. With plans to use crypto for trade despite sanctions, the FTS seeks to balance strict taxation with growth, likely adjusting rules to stay competitive.

In summary, Russia’s crypto taxes include a 13-15% rate on profits, a 25% corporate tax, and strict reporting requirements, all overseen by the FTS. Individuals should track their trades and file by April 30 to avoid fines or jail. As digital coins gain popularity, adhering to these laws allows Russians to participate in the market without legal issues, balancing growth with tax obligations. Consulting a tax professional can simplify the process, helping individuals manage their crypto assets legally and efficiently.