• The Russian finance ministry has launched a fresh attempt to tax crypto miners.
• The ministry hopes to evade the impasse by using the nation’s tax code regulations.
• The precise form of taxation is as-yet undecided and will be contained within the framework of a much-delayed draft law on crypto mining.
The Russian finance ministry is making a fresh attempt to tax crypto miners in order to overcome the obstacles thrown up by the nation’s Central Bank and law enforcement agencies. This is the second time they have tried to regulate the crypto mining sector, with industrial players urging Moscow to “legalize” their operations and energy players looking to mine tokens using surplus energy and associated gas.
However, the Central Bank wants miners to sell their coins on overseas exchanges to prevent them from “entering” the Russian economy, while law enforcement officials are concerned that this could lead to money laundering. To get around this, the finance ministry is looking to use the tax code regulations to tax crypto miners on their profits.
At the moment, mining is neither legal nor illegal in Russia and because it is not classified as an entrepreneurial activity, it cannot currently be taxed. To rectify this, the ministry is pushing for legislative changes to the tax code, which will require Central Bank and parliamentary approval. The precise form of taxation is as-yet undecided and will be contained within the framework of a much-delayed draft law on crypto mining.
Anatoly Aksakov, the Chair of the State Duma Committee on Financial Market, commented on the issue, saying that the law needs to be adopted before the start of next year in order to offer clarity to the crypto mining industry. He also pointed out that the law needs to clearly determine the taxation of crypto mining profits, as well as the taxation of crypto transactions.
The finance ministry is hopeful that by using the tax code regulations, they can overcome the impasse and give clarity to the crypto mining sector. It remains to be seen whether they will be successful in their attempt.