News Overview

Russia plans to impose value-added tax (VAT) on companies leasing mining equipment or data centers to overseas enterprises and mining pools.

Since September 1, 2024, Russia has officially allowed the use of cryptocurrencies in cross-border trade and digital asset exchanges, covering mainstream currencies like Ethereum (ETH) and stablecoin USDT. This makes the country one of the few globally to legalize cryptocurrencies as payment tools. In November of the same year, Russia’s cryptocurrency mining industry gained legal status, ending years of gray-zone operations. In January this year, a law requiring all industrial miners and "mining infrastructure operators (MIO)" to register in a national directory took effect. As of April 1, 2025, 116 MIOs and 606 industrial miners (промышленные майнеры) have completed registration, but the Federal Tax Service (FTS) believes many enterprises remain non-compliant. Managed by the FTS, the directory is now being used to formulate detailed tax rules for the annual profits of industrial miners and MIOs.

On May 1, 2025, Russia’s Ministry of Finance proposed levying VAT on companies leasing mining equipment or data centers to overseas enterprises and mining pools, including energy firms supplying power to foreign mining companies. The ministry stated that this aims to clarify tax procedures for mining equipment rentals and establish rules for enterprises providing "mining computing power" to non-Russian clients. Due to the lack of "clear interpretation" in current regulations, enterprises face difficulties in filing returns, and VAT may apply to real-time, monthly, or annual lease invoices.

News Links:

https://www.cryptopolitan.com/zh-cn/russia-to-tax-crypto-mining-hardware-rentals-for-foreign-companies/

https://tass.com/economy/1826725

Details of Russia’s New VAT Regulations

2.1 Legislative Process

On May 1, 2025, Russia’s Ministry of Finance formally proposed a bill to impose VAT on cross-border mining services, marking a key step in tax regulation for the cryptocurrency mining industry. The bill is currently in the public consultation period, allowing industry associations, enterprises, and the public to provide feedback before entering the parliamentary review process. If passed, it is expected to take effect on January 1, 2026, alongside amendments to Article 149 of the Russian Federal Tax Code to clarify VAT rules for digital currency transactions. To ensure a smooth transition, the bill sets an adjustment period for registered miners and infrastructure operators, while requiring power suppliers to separately report cross-border mining electricity usage for precise tax targeting and to avoid excessive interference with basic energy services.

The current dispute focuses on the tax scope: energy industry associations oppose including electricity sales in the VAT system, arguing it belongs to basic energy services with costs already reflected in electricity prices, while the Ministry of Finance insists electricity is a core cost of mining and should be covered by VAT to capture full economic value. This分歧 (disagreement) may impact final tax rate setting and compliance costs for related industries.

2.2 Legal Definitions and Registration Requirements for Industrial Miners and MIOs

Russia clarified the legal definitions of industrial miners (промышленные майнеры) and mining infrastructure operators (MIO) as early as August 8, 2024. According to ITAR-TASS, Russian President Vladimir Putin signed a law on August 8 (Moscow time, UTC+3) introducing new concepts such as digital currency mining, mining pools, MIOs, address identifiers, and individuals organizing mining pool activities. It specifies definitions, identification standards, registration objects, and required documents for industrial miners and MIOs.

- Industrial Miners (промышленные майнеры): Legal entities or individual entrepreneurs engaged in large-scale cryptocurrency mining, typically involving high energy consumption and large equipment scales. Requirements include:

1. Registration as a Russian legal entity or individual business, included in the FTS-managed "Individual Register of Cryptocurrency Miners".

2. For natural persons using household electricity, energy consumption must not exceed government-set limits (dynamically adjusted by the Ministry of Energy).

3. Regular reporting of mining income to tax authorities, with tiered taxation: 13% for annual income below 2.4 million rubles, and 15% for amounts above.

- Mining Infrastructure Operators (MIO): Providers of cryptocurrency mining infrastructure and services, including equipment management and data center operations. Strict standards include:

1. Obtaining a "MIO License" issued by a federal government committee under the Ministry of Digital Economy.

2. Offering services like mining hosting, data center leasing, and computing power sales, but prohibited from integrating with core power industry businesses.

3. Submitting documents to the FTS, such as articles of association, technical plans, and power purchase contracts.

4. Undergoing annual compliance audits.

Registration requirements for both include:

- For legal entities: Notarized articles of association, tax registration certificate, and main state registration number.

- For individual entrepreneurs: Identity documents (e.g., notarized passport) and registration number.

- Additional materials: Mining equipment lists, electronic signatures of qualifications, technical parameters, energy consumption statements, and digital wallet addresses for receiving profits.

2.3 Tax Elements of the New VAT Regulations

The draft bill specifies that VAT will cover cross-border mining services, including equipment leasing, real-time computing power services, and electricity supply (if the Ministry of Finance’s plan is adopted). Key points include:

- Tax rates: 20% for equipment lease income; zero rate for services to Eurasian Economic Union (EAEU) member states, requiring submission of clients’ tax registration certificates and service purpose statements.

- Tax obligations: Russian-registered service providers (including foreign company branches) are liable. If lessees fail to file returns, data center operators (as equipment controllers) bear joint responsibility for tax and late fees.

- Filing cycles:

- Monthly: VAT returns, notarized Russian-English cross-border contracts, foreign exchange income certificates, and EAEU tax registration proof for zero-rate applications.

- Annual: Equipment usage logs recording clients’ daily computing power output (TH/s·day).

All documents must be submitted via FTS-certified electronic signatures, with computing power services measured daily to match contract terms.

FinTax Comments

People debates on the new VAT rules are intense. Supporters highlight two benefits:

1. Policy synergy: The registration requirement for all mining operations allows tax authorities to grasp industry equipment data, enabling precise VAT collection.

2. Government revenue: The Ministry of Finance estimates annual VAT revenue of 45–60 billion rubles, primarily for upgrading domestic power infrastructure to support the high-energy mining industry and other public welfare sectors.

Critics, however, warn that:

- Short-term tax increases may force small and medium industrial miners and MIOs to exit cross-border business, accelerating industry consolidation.

- Long-term, leading players may relocate data centers to low-tax countries like Kazakhstan, reducing Russia’s global computing power share and weakening its influence in cryptocurrency mining.

Key concerns include:

- Disputes over tax classification (whether mining services should be categorized as "equipment leasing" at 20%).

- Severe lack of cross-border transaction evidence, with over 60% of mining enterprises unable to provide overseas clients’ tax payment certificates, leading to rejected input tax deductions.

- Unclear energy cost allocation, as power expenses account for most operational costs, but VAT deduction ratios for power purchase invoices are undefined.

Despite controversies, this represents a meaningful attempt to drive cryptocurrency policy transition and market health. If implemented effectively, Russia may expand reforms to more sub-sectors, guiding the industry’s development while safeguarding national interests.

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