Introduction#
On Tuesday, Russia’s Ministry of Finance announced that the government has approved a new bill aimed at updating the Tax Code to address the use of digital currencies and digital rights within the country.
Key Tax Measures#
The approved bill introduces several important tax measures for transactions involving digital assets. Notably, there will be an exemption from value-added tax (VAT) on the sale of certain foreign digital rights that certify monetary claims. Additionally, services provided by digital depositories and organizations that facilitate digital currency exchanges will also be exempt from VAT.
Responsibilities for Brokers and Taxpayers#
Under the new regulations, brokers and trustees involved in transactions with digital currencies or foreign digital rights will be required to act as agents for individual income tax purposes. This means they will have specific responsibilities to ensure that taxes are properly accounted for in these transactions.
Individual taxpayers will have the ability to offset gains and losses from their digital currency transactions within the same tax period. However, it’s important to note that taxpayers will not be allowed to carry forward any losses to future tax periods.
Corporate Tax Implications#
The bill further specifies that income and expenses from digital currency transactions, excluding those related to mining, will be included in the general corporate income tax base when conducted under foreign trade agreements. Additionally, a preferential corporate income tax rate will be applied to periodic payments on digital financial assets issued in Russian rubles by domestic entities that are traded on organized markets.