Taxation of Crypto Mining: Why the Tax Arises Before You Sell the Coin

In Russia, income from mining is deemed received not when you sell the coin for roubles, but when you acquire the right to dispose of it — that is, at the moment the reward is credited to an address you control. This is the point that most confounds newcomers' intuition: the coin is still sitting in the wallet, the price may already have fallen, yet the tax base for the mining income was formed on the day of receipt and at that day's value. The sale will be accounted for separately and later.

The legal framework has been built up in several layers. Federal Law No. 259-FZ of 31 July 2020 introduced the very concept of digital currency; Federal Law No. 221-FZ of 8 August 2024 legalised mining as a business activity with a register of participants; and Federal Law No. 418-FZ of 29 November 2024 completed the tax side, recognising digital currency as property for tax purposes and introducing special rules for calculating the tax base.

When income is recognised and how it is valued

For tax purposes, digital currency is property (Article 38 of the Russian Tax Code), and a mining reward is income in kind. Two consequences follow. First, the date of the income is the day the right of disposal arises, not the day the coin is converted into fiat. Second, income in kind must be valued at its market value on that date, determined by the quotation on a trading platform that meets the conditions set out in the Code. For individuals, the specifics of the tax base for digital currency transactions are set out in Article 214.11 of the Tax Code; for companies, in Article 282.3.

The practical conclusion is an unpleasant one: in a falling market, tax may be charged on a value the coin no longer has. This is not a calculation error but the design of the rule — the income was fixed in the past.

Expenses that reduce the tax base

Mining is the only part of crypto taxation where the expense side looks natural. The tax base for mining is calculated as income minus expenses directly related to mining: electricity, rent of premises and capacity, depreciation or the cost of equipment, and maintenance. That is why the paper trail is critical: the power supply contract, payment documents, the data-centre agreement, certificates of services rendered. Without supporting documents, an expense does not exist as far as the tax authority is concerned, even if it was actually incurred.

Selling the coin is a separate tax base

Mining and disposal are assigned to separate tax bases and are not mixed with ordinary employment or business income. On a sale, the proceeds are recognised as income, while the expense is the very value at which the coin was previously recognised when mined, plus the costs of the transaction itself. In other words, value that has already been taxed is not taxed a second time — but it is netted only within its own base. A loss on a sale does not automatically offset the tax charged on mining income, and within its own base it is carried forward to future periods under the general rules.

Who may mine and which tax regime applies

Legal entities and individual entrepreneurs may engage in mining once they have been entered in the register administered by the Federal Tax Service (FTS). An individual may mine without registration as long as they stay within the energy consumption limit set by the government; exceeding it moves them into the category of those required to register.

Special tax regimes are a separate trap. Mining and the sale of digital currency rule out the use of simplified and preferential regimes: neither the simplified taxation system, nor the professional income tax for the self-employed, nor the patent system. Companies pay corporate profit tax at the standard rate, and individuals pay personal income tax under the progressive scale applicable to this base. For VAT purposes, transactions in digital currency and mining itself are not treated as taxable supplies (Article 146 of the Tax Code), and no VAT invoices are issued for the reward.

Visibility to the tax authority

Operators of mining infrastructure are required to report to the tax authority, on a quarterly basis, information about those who host equipment with them. This means that industrial-scale mining in a rented data centre is transparent by default: the client's details reach the FTS regardless of whether the client has filed a tax return. A discrepancy between this data and the client's reporting is a typical trigger for questions from the tax authority.

How this differs from taxes on exchange trading

The logic of the stock market is different: there, the broker acts as tax agent and withholds the tax itself, and the financial result is calculated on closed trades. In mining there is no agent — calculating and declaring the tax is the taxpayer's own responsibility, and the income arises without any trade at all. If you are comparing regimes before choosing an instrument, look at how the equity market and government bonds work, where the tax mechanics are built into the infrastructure. We explain the terminology used in both worlds in our glossary, and track rule changes in our market news. For dividend income, where tax is also withheld at source, the dividend payment calendar is a useful reference.

If it all comes down to one action, it is this: record the date and value of every reward you receive straight away, not in April just before filing your return. Reconstructing a coin's value on the day it was credited after the fact is far more costly than recording it at the time.