Russia, they can introduce a tax when withdrawing crypto in rubles

The Ministry of Economy proposed to allow mining in regions with a steady surplus of electricity generation, introduce reduced commercial tariffs for its consumption for these purposes, and also establish a tax on converting cryptocurrency to rubles. This came to the Ministry of Izvestia. The legislative regulation of mining was also supported by the Ministry of Energy, but the initiative was opposed by the Central Bank. The proposed measures will help stop shadow mining and introduce crypto into the legal field, but will limit the production of digital currencies, experts say. At the same time, in their opinion, it is better to tax the profit from operations, and not all transactions upon the fact of the exchange.

Mining rates

The regulation of the circulation and issuance of digital currencies in Russia began to be actively discussed in Russia after the publication by the Central Bank of a report on this topic on January 20: it, among other things, proposes to completely ban the mining of cryptocurrencies. At the same time, the Ministry of Finance is preparing legislative proposals to control mining and discussing the taxation of cryptocurrencies as real estate, that is, the introduction of income tax. The Ministry of Economics also disclosed its specific proposals regarding the regulation of digital currencies to Izvestia.

Cryptocurrency mining should be recognized as a commercial activity and taxation should be introduced upon the fact of converting cryptocurrencies into rubles, following the example of Japan and Germany, the department believes. At the same time, mining should be allowed in regions with a steady surplus of electricity generation and offer acceptable prices for businesses for its consumption, the Ministry of Economics added, explaining that this would remove the risks of insufficient power supply to housing, social facilities, and industry in other territories.

To reduce the cost of such activities of companies in certain regions, the ministry proposes to introduce reduced rates for connecting mining farms and data processing centers to energy sources, as well as to set low tariffs for the Federal Grid Company. Moreover, prices will not depend on the place of production, even if it is placed at generation facilities. Thus, the connection of mining devices to electricity and the cost of kilowatts per hour will turn out to be inexpensive, the Ministry of Economics specified.

Among other initiatives of the ministry is to introduce a threshold for the use of electricity for individuals. This value is yet to be determined. It should fully cover the household needs of the household, his representative clarified, explaining: if consumers start mining, their expenses will increase. This will become an indicator for the establishment of an increased tariff, as for industries.

However, the Bank of Russia negatively assessed the idea of ​​legalizing the circulation and issuance of cryptocurrencies. By creating unproductive demand for electricity, mining will limit production in the country and jeopardize the supply of residential facilities and enterprises, the Central Bank told Izvestia. Such measures will not bring benefits to the economy. Also, in contrast to the goal of cryptocurrency mining to achieve carbon neutrality, the regulator said that the competitiveness of mining in Russia is not involved in the development of high technology, but with cheap electricity, when importing software and hardware.

The Ministry of Energy supports the legislative regulation of mining, its representative told Izvestia. The Ministry of Finance did not answer whether the department supports the initiatives of the Ministry of Economics.

From shadow to taxes

The appearance of taxation suggests that cryptocurrencies will be introduced into the legal field, so this is a positive step, Vladimir Ananiev, an analyst at Exante investment company, is sure. The tax may correspond to the regime chosen by the miner - 20% of the profit for large companies, of which 18% will go to the region's budget. The recognition of the taxable base should be at the time of conversion - the sale of the created goods. According to the expert, the introduction of a threshold for the use of electricity for individuals will also help determine shadow mining.

Entrepreneurs must pay taxes on such products. And leaving the proposed system will be impossible since bank accounts are transparent for tax services, says Evgeny Vlasov, head of Comino. In his opinion, crypto mining should be allowed everywhere, as it provides investments in the high-tech sector.

The proposed taxation system runs counter to the initiative of the Ministry of Finance, said Vladimir Gorbunov, CEO of Crypterium and Choise.com. If you introduce a tax, then you need to tax profits or apply a scale depending on the volume of transactions with a minimum threshold at which the obligation to report and pay does not arise, he believes. After all, it is possible to sell a crypt at a loss, and then when switching to rubles, the investor will lose not only on currency revaluation but also on taxes.

It is not worth rushing to create new regimes without making sure that the old ones - such as taxation of profits, income in different ways, value-added - do not work, says Kirill Nikitin, director of the Center for Tax Policy at the Faculty of Economics of Moscow State University. You need to understand that, firstly, the problem is not the complexity of taxation, but the shadow nature of the activity, and secondly, that the result of production may begin to be taxed even if no conversion has occurred, he said. By solving the problem of parasitic use by miners of subsidized tariffs for individuals, we will see the real economy of “mining” cryptocurrencies and will be able to discuss taxation more meaningfully.

When withdrawing crypto, you can apply the tax model as when exchanging currency for rubles, says Alexei Tarapovsky, founder of Anderida Financial Group. According to him, when making a profit from such operations, the standard personal income tax regime is used, due to which local budgets are supported, and there is no point in introducing a new system with digital currencies.