Russia

In Russia, cryptocurrencies are legally classified as digital financial assets (DFAs) or property under Federal Law No. 259-FZ. While they are recognized, their use as a means of payment for goods or services is prohibited. The overall regulatory status is regulated, with a dedicated framework in place. The Federal Tax Service (FNS) of Russia is responsible for governing cryptocurrency taxation. Reporting is mandatory for individuals and organizations when annual crypto transactions exceed 600,000 Russian Rubles (RUB). The Bank of Russia oversees the broader regulation of digital financial assets. For individuals, profits from cryptocurrency, including capital gains and various forms of income, are subject to progressive personal income tax rates. This means income up to 2.4 million RUB is taxed at 13%, while income exceeding this amount is taxed at 15%. These rates are unified with the tax base for securities. There are no reduced rates or exemptions for long-term holding periods, both short-term and long-term gains are taxed at the same progressive rates. Converting cryptocurrency to fiat currency, such as RUB, is a taxable event, with capital gains calculated on the difference in RUB value. Corporate entities are subject to a standard 20% corporate tax rate. Cryptocurrency transactions themselves are exempt from Value Added Tax (VAT), though services related to crypto might incur a 20% VAT. Specific activities like staking are taxed as income upon receipt, falling under the progressive individual income tax rates of 13-15%. Mining is considered business income, and expenses such as electricity and hardware may be deductible if the activity is classified as a business. Decentralized Finance (DeFi) yields are taxed as income with each realization event subject to the 13-15% progressive rates. Non-Fungible Token (NFT) sales are taxed as income or property disposal, without any specific exemptions for collectibles. Crypto-to-crypto swaps are considered taxable events, with gains calculated based on the fair market value at the time of the exchange. Russia is moving towards further regulation, with comprehensive licensing for crypto exchanges and brokers expected by July 2026. Full enforcement of new rules, which may include retail caps (e.g., $4,000 per year) and eligibility tests, is anticipated by July 2027. These reforms are likely to introduce significant changes to the existing landscape.