After imposing a ban on cryptocurrency, the lower house of Russian Parliament passed a bill on taxation of digital assets and removed the ban. Crypto tax in Russia is imposed with the intention of reconnecting with the world after global condemnation it received after invading Ukraine. The Parliament has identified the need to have a separate tax regime for cryptocurrency and digital assets. While they have introduced taxes on crypto, there is still a long road ahead with ambiguity regarding what transactions will be taxable and how these assets will be treated.
These steps also are welcome by the citizens as 14.6 million people in Russia hold cryptocurrency with Ethereum being the most popular one. The Central Bank and Finance Ministry of Russia have also indicated that they are working on legalizing crypto in the foreseeable future.
Do you have to pay crypto tax in Russia?
Yes, currently you have to pay a 20% Value Added Tax (VAT) on crypto in Russia. Under the new bill proposed in 2022, there is tax levied on the income generated from holding cryptocurrency and they are taxed as “securities”.
When do you have to pay tax on crypto in Russia?
Under the new bill, Income generated from cryptocurrency would be subject to taxes in Russia. Therefore, whenever there is a sale of cryptocurrency or there are capital gains, it would be taxed. However, only the sale of crypto is taxable currently.
What crypto transactions are taxable in Russia?
The sale of cryptocurrency would be taxable in Russia. Currently, crypto assets are subject to VAT. There is ambiguity about whether exchange of crypto would be taxed or not but any and all transactions leading to profit or income generation are subject to taxes.
What are the Crypto Tax Rates in Russia?
Crypto Tax rates in Russia would be, under the new law, 13% for an individual’s personal income and 20% for legal entities. There are deductions possible for investors up to 52,000 rubles. Transactions amounting to more than 6,00,000 rubles are mandatory to report without fail.
Currently, crypto transactions are taxable at a rate of 20% for all bases.
Russia Income Tax Brackets (2023)
| TAX CATEGORY | TAX RATE (%) |
| INCOME RECEIVED AS SALARY IN CASH OR KIND | 13 |
Russia Capital Gain Tax Rates (2023)
There is no separate capital gains tax in Russia. They are taxable according to the income tax rates prevalent.
How is Tax Calculated on Cryptocurrency in Russia?
Currently, digital assets are taxable under VAT in Russia at the rate of 20%. Therefore, 20% of the selling price is automatically invoiced and collected from the consumer.
Although, under the new bill, tax would be levied on the income generated from crypto assets in Russia. There are two ways by which the cost price of crypto assets can be determined, which then has to be deducted from selling price to get the income generated value.
According to FIFO Method, you sell your oldest acquired coin first and cost is calculated according to the respective prices at which the coin was bought. Whereas, in ACB, time of buying doesnt matter and average cost is taken into account.
Let’s take an example,
Say you bought 2 BTC for 20,000 rubles in 2020 and 4 BTC for 60,000 rubles in 2021. Then you sold 4 BTC in 2022 for 1,00,000 Rubles:
- FIFO METHOD
You sell 2 BTC from 2020 and 2 BTC from 2021. So cost price is:
= 20,000 + (2/4)*60,000
= 50,000 rubles
Profit = 1,00,000 – 50,000
= 50,000
Here, taxes are levied on 50,000 rubles.
- ACB METHOD:
All coins are of the same denomination. Therefore, cost price for one coin:
= (20,000 + 60,000)/6
= 13,333 rubles
So, cost price of 4 coins:
= 53,333 rubles
Profit = 1,00,000 – 53,333
= 46,666
Here, taxes are levied on 46,666 rubles.
Is there any Crypto Tax Free in Russia?
As crypto transactions are taxable under VAT, there is no crypto tax free in Russia.
Crypto Tax in Russia – FAQs
Do you have to pay tax when you buy crypto in Russia?
No, there is no tax on buying crypto in Russia.
Do you have to pay tax when you sell crypto in Russia?
Yes, a VAT of 20% is levied on the selling price of crypto.
Do you have to pay tax when transferring crypto in Russia?
No, taxes are not levied while transferring crypto in Russia.
Do you have to pay tax when spending crypto in Russia?.
Crypto spending should be taxed under VAT in Russia.
How much tax on crypto gains in Russia?
Currently, a VAT of 20% on selling price of crypto assets is levied in Russia.
How do I avoid capital gains tax on crypto in Russia?
Deductions could be used to lessen the amount of tax owed.
Market Research Intern, Octaloop
Maitreyee takes a keen interest in financial technologies and their potential to transform lives at the grassroots. Put together with her penchant for Economic Research, she brings tonnes of academic and actionable insight into our products. Maitreyee is contributing at Binamite as a Market Research Intern, and when she's not doing that, you can find her exploring the city or buried in a book.