Russia To Identify Crypto Miners, Tax Break Possible

The Russian Ministry of Communications and Mass Media is developing a system to detect crypto miners to tax them, Vedomosti reported, citing two undisclosed sources familiar with the matter.

“There will be a special system for detecting miners – through electricity consumption and Internet traffic – to compare the capacity of the mining equipment with the amount of cryptocurrency declared on a crypto exchange,” according to the publication. They also reported that miners are looking at special tariffs and energy quotas.

Andrei Koptelov, Director of the Center for Economic Research at the Synergy University, argues that “it is virtually impossible to distinguish between what consumes electricity, a mining farm or household heater, and the means of private virtual networks allow you to encrypt traffic.”

RBC reported that the bill considers mining an entrepreneurial activity. Another report states that “miners will be given two years of tax holidays with compulsory accounting. Then they will be obliged to pay profit tax, and they will not allow you to pay VAT.”

According to Ria Novosti, Deputy Finance Minister Alexei Moiseev told reporters that “the Finance Ministry of Russia does not see the need for tax holidays for miners.”

The bill for this regulation is expected to be submitted by February 1st.