A draft law that might potentially exempt issuers of digital assets from paying value-added tax was recently adopted by Russian MPs. New tax rates have also been established on income obtained from the sale of such assets.
New Crypto Legislation in Russia
According to Reuters, the State Duma (Russia’s national assembly) passed the draft law after Tuesday’s second and third readings. According to reports, it will exclude from value-added tax those who issue digital assets and “information systems operators” who help with that process.
A product’s value-added tax is imposed based on how much it has gained in value throughout its manufacture. As of late 2020, nearly no countries levied a VAT tax on the trade of virtual currencies, according to the Inter-American Centre of Tax Administrations.
The current income tax rate for cryptocurrencies in Russia is 20%, which is the same as that for traditional, conventional assets. However, the proposed law would lower this tax to only 13% for Russian businesses and 15% for others.
The bill still needs approval from the upper house and be signed by Vladimir Putin to become a law.
Russia’s Position on Crypto
Russia continues to have mixed feelings about cryptocurrency. Authorities in different regions seem to have different perspectives on digital assets.
In January, Russia’s central bank suggested outright banning cryptocurrencies, citing worries about financial stability and comparing them to “pyramid schemes” that pose risks to national monetary policy. The Ministry of Finance swiftly rejected this strategy, believing that regulation was a preferable course of action.
On the other hand, a bill that would outlaw the use of digital assets for specific payment purposes has already passed its first reading in the state. The central bank’s view appears that citizens cannot benefit from cryptocurrencies, but they can be a valuable instrument for international trade.
The former position seems to be getting more and more common. In March, a State Duma delegate suggested that Russia might start accepting Bitcoin for payments for foreign oil.
This happened a few weeks after western countries seized $600 billion of Russia’s foreign exchange reserves and expelled the country from the SWIFT payment system. Some prominent individuals believed that piquing Russia’s interest in the currency, such as former BitMEX CEO Arthur Hayes and investor Bill Miller, would be bullish for Bitcoin.