Russia has approved a draft bill that exempts cryptocurrency issuers from Value Added Tax (VAT). This move is to further strengthen its pro-crypto stance through its legislation. The lower house of Russian legislature, The State Duma has passed this bill.
Reportedly, some other services related to the crypto exchanges shall also fall under exemption. The present tax rate for crypto firms that are engaged in these deals concerning digital assets stand at 20%. The continued sanction from the west have wreaked havoc in Russia after the Ukraine invasion.
Russia has been witnessing financial crisis and that has in turn made it difficult for Russia to conduct international transactions. In order to boost its economy, Russia has undertaken a positive stance on crypto to facilitate the growth of the industry.
Details Of The Crypto VAT Exemption
Apart from the exemption from VAT, this bill that has been passed stated that income tax rate will be of 13% for crypto exchanges on the first 5 million Rubles which is presently valued at $93,000 of taxable base annually, 15% on amounts that cross the aforementioned level and 15% across the board for foreign exchange operators.
The Russian Central Bank however has been on the opposing side of crypto just like other central banks across the globe. Despite opposing crypto, the state licensed the first local digital asset platform, Atomyze Russia. Post licensing Atomyze Russia, top lender Sberbank was provided a license.
The members of the State Duma has approved to draft the tax law. The bill is aimed at reducing taxes for crypto issuers and also helps defines tax rates on the income received from the sale of the assets. Now for this bill to become a law, it requires the signature of President Vladimir Putin.
Once and if the bill has been passed then the particulars of how digital assets are to be managed will be laid down. The taxation of digital assets under the bill is analogous to securities taxes at the present moment, once the bill is passed some light would be shed on the said stance.
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Russian Banks Blocked From The SWIFT System
Russia Banks have been blocked from the SWIFT system and Group Of Seven G7 countries recently ceased purchase of newly mined and refined Russian gold. This has added further pressure on Russia’s financial condition.
Not just this, there has other sanctions which has caused Russia to default on foreign debt servicing. Anti crypto leaders in the US are of the notion that Russia may turn to crypto to avoid sanctions and so they insist on the crackdown.
Russia for the first time ever since 1917 has defaulted on the foreign debt. The year 1917 is historic as the Bolshevik Revolution had taken place that year. Russia was given a grace period of 30 days but it failed to pay interest on two different bonds.
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