Russian Lawmakers Approve Tax Breaks for Cryptocurrency Issuers

Key Takeaways:

  • On Tuesday, Russian lawmakers accepted a proposed law that might exempt cryptocurrency and digital asset issuers from value-added tax.
  • Additionally, it sets tax rates for money made from the sale of digital assets.
  • As with standard assets, the current transaction rate is 20 percent. The tax would be 15% for foreign companies and 13% for Russian companies under the law change.

The Russian parliament on Tuesday authorised a draft legislation that would preclude companies that issue cryptocurrencies and other digital assets from value-added tax (VAT). The central bank of Russia has long cited worries about financial stability as justification for its wariness of cryptocurrencies and other digital assets.

The Central Bank of Russia (CBR) released a report on January 20 that called for a complete ban on cryptocurrency mining, trading, and usage throughout the country. The risk of using cryptocurrencies is “much higher in the emerging markets, including Russia,”

However, in February, the regulator granted Atomyze Russia’s blockchain platform the first licence to exchange virtual currency. Soon after, Sberbank, the dominant lender, received a licence.

In addition to exempting issuers from paying VAT, the law would establish a new tax rate of 13% for Russian companies and 15% for foreign ones on taxable income from digital assets, as per a review from Reuters. Members of the State Duma approved it today during the second and third readings.

This law in question symbolises a shift in perception for the nation that has initially harshly criticised digital assets and must be authorised by both the upper house and President Vladimir Putin in order to become law.

Due to the events in Ukraine, unparalleled Western sanctions have hit the core of Russia’s financial system, and lawmakers are rushing to pass new legislation to lessen the blow.

Russia’s crypto embrace seems to be expanding, Sberbank, the biggest bank in Russia, announced in March that it would soon begin issuing and exchanging digital assets after receiving approval from the Russian central bank. This came after a decision in February to grant Atomyze Russia, a blockchain platform, the first licence to exchange virtual currency.

Default image
Aadrika Sharma

I enjoy writing and try to learn new things every passing day!

Newsletter

Crypto News, NFTs and Market Updates

Can’t find what you’re looking for? Type below and hit enter!