At the end of 2024, a law came into force in Russia requiring miners to pay taxes on income received from cryptocurrency mining. According to the new rules, mining rewards are equated to the income of individuals and legal entities and are subject to taxation. Penalties are provided for failure to pay. We look into the details of tax regulation together with Viktor Pershikov, head of the compliance department EMCD .
Taxes for individuals (residents of the Russian Federation)
Since 2024, miners consuming more than 6000 kWh of electricity per month are required to register and report to tax authorities (in accordance with Federal Law No. 259-FZ "On Digital Financial Assets"). The mined kriptovalyuta is considered income in kind and is assessed at its value at the time of receipt.
Example: if a miner has mined 1 BTC at a cost of $100,000, then his income will be $100,000 minus expenses (equipment, electricity, data center services, etc.). Individuals file a declaration on form 3-NDFL, indicating income minus expenses. The tax rate is from 13% to 22%. The declaration must be filed annually before April 30.
For late filing, a fine of 5% of the tax amount is imposed for each month of delay (but not more than 30% and not less than 1000 rubles).
Taxes for individuals (non-residents of the Russian Federation)
Persons who have been in Russia for less than 183 days are considered non-residents and are taxed at a rate of 30% of the income received without the possibility of taking into account expenses.
Example: If a non-resident miner has mined 1 BTC worth $100,000, he must pay a tax of $30,000. The declaration must be submitted by April 30 of the following year. Penalties are charged for late payment, and non-payment for more than three years may result in criminal liability.
Taxation of individual entrepreneurs (OSN)
If a miner is registered as an individual entrepreneur (IE), his income is taxed taking into account the professional deduction (either on the amount of expenses or in the amount of 20% of income). The tax rate is from 13% to 22%.
The 3-NDFL declaration must be submitted before April 30, and advance payments are made:
● until April 28 (1st quarter);
● until July 28 (half year);
● until October 28 (9 months).
Taxes for individual entrepreneurs (simplified tax system)
Miners cannot use the simplified taxation system (STS), but can choose the object of taxation:
● “Income” – tax 6% of the total income.
● “Income minus expenses” – tax of 15% of the difference between income and expenses (but not less than 1% of income).
The simplified tax system declaration is submitted before April 25. Advance payments must be made before April 28, July 28 and October 28.
There are penalties for non-payment:
● 20% of the tax amount;
● 40% if the evasion is deemed intentional.
Taxes for legal entities
Legal entities engaged in mining operate under the general taxation system (GTS) and are required to pay income tax (25%) or VAT (6% of the income). Mining operations are not subject to VAT, but companies are required to account for VAT on a general basis.
The tax base is formed from the value of the mined cryptocurrency on the date of its receipt minus expenses. Reporting periods are quarter, half-year, nine months and a year. The income tax declaration is submitted quarterly by the 28th day of the following month.
Fines for violation of tax laws:
● 20% of the amount of unpaid tax;
● 40% – in case of deliberate evasion.
If you have any questions about taxation, you can get a free consultation with EMCD specialists.
