Russian lawmakers approved a draft law recently that could exempt digital asset issuers form making value-added taxes payments. The draft law also established new tax rates for income from the sale of such assets.
Russia’s New Crypto Legislation
According to Reuters, the draft law was passed after second and third readings were given by members of Russia’s Federal Assembly (the State Duma). The law will exempt digital asset issuers and information system operators from value-added taxes.
Value-added taxes apply to goods based upon how much they have increased in value at each stage of production. The Inter-American Centre of Tax Administrations stated that almost all countries did not apply a VAT tax for the exchange of virtual currency as of late 2020.
Concerning income tax payments in Russia, the current tax rate for crypto is 20%. This is in line with standard assets. The draft law would lower this tax to 13% for Russian businesses and 15% for all other companies.
To become law, the law must still be signed by both President Vladimir Putin and the upper house.
Russia’s Crypto Stance
Russia’s attitude towards crypto remains ambivalent. The opinions of regional authorities on digital assets are varying.
Russia’s central bank suggested that cryptocurrency be banned completely in January due to financial stability concerns. It compared them to “pyramid scheme” and as threats for sovereign monetary policies. The Ministry of Finance rejected this proposal and deemed regulation to be a better alternative.
The state has completed the first reading of a bill to ban digital assets from being used for payment-specific purposes. The central bank seems to believe that cryptocurrencies are a useful tool in international trade, but not for citizens.
This former position is becoming more popular. In March, a member of the State Duma suggested that Russia might accept Bitcoin to pay for international oil payments.
It was just weeks after Russia was expelled from the SWIFT payments network and $600 billion of its FX reserve was seized by Western nations. Notable figures such as Bill Miller, an investor and former CEO of BitMEX, believed this would be a bullish move for Bitcoin by piqueing Russia’s interest.
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