Lawmakers in Russia have approved a draft law potentially removing value-added tax from the issuance of digital assets and cryptocurrencies.
The draft law, which establishes tax rates on income earned from the sale of digital assets, was approved by members of the State Duma in its second and third readings. At the same rate as standard financial assets, cryptocurrency transactions are currently taxed at around 20%. However, the new law would crop that figure to 13% for Russian companies and 15% for foreign enterprises.
It would also exempt issuers of digital assets, along with information systems operators involved in their issue, from a value-added tax. Before becoming law, the draft bill must still pass the upper house of the State Duma and thereafter must get signed by President Vladimir Putin.
Following its invasion of Ukraine, Russia has been cut off from the Western financial system by unprecedented sanctions, which local lawmakers have scrambled to deal with. For this reason, financial authorities are now reconsidering previously skeptically held views of cryptocurrencies, like the central bank’s long-held concerns over the financial stability of digital assets.
In February, the national regulator gave the blockchain platform, Atomyze Russia, the first license to exchange digital assets in the country. This was soon followed by a license for dominant lender Sberbank. That same month, the Russian Ministry of Finance submitted an earlier draft bill that called for using crypto for international settlement payments.
Recently, Russia’s Rostec Group, a government organization that includes a number of technology companies, announced they developed a blockchain platform to launch a digital system for international payments capable of replacing the global SWIFT system. Russian banks were excluded from the SWIFT system in February, thanks to sanctions imposed by Western countries in response to the country’s invasion of Ukraine.
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