Crypto issuers exempted from VAT in Russia in a newly approved draft law

• Lawmakers in Russia have approved a draft law that could potentially exempt digital assets and crypto issuers from Value-Added Tax (VAT).

• Morocco is also reviewing its money laundering and anti-terrorism financial regulations in the country.

Russia has maintained a strong stance against crypto with the Central Bank raising serious concern over the financial instability threat posed by the digital assets. However, the unprecedented sanctions imposed on the country have left it with no option but to take a soft decision on cryptos. Even though Elvira Nabiullina, the head of the Central bank of Russia recently reiterated her stance that crypto has no place in the Russian financial system, she clarified that it can be used for foreign trade and activities.

In February, Russia permitted the blockchain platform Atomyze Russia to operate. That is the first-ever license given to a platform to exchange digital assets. Dominant lender Sberbank soon obtained its license to operate in the country.

In the latest development, lawmakers in Russia have approved a draft law that could potentially exempt digital assets and crypto issuers from Value-Added Tax (VAT).

In the approved draft law, the second and third readings on Tuesday considered exemptions on value-added tax for issuers of digital assets and information systems operators involved, and It establishes tax rates on income earned from the sale of digital assets.

The draft law further specifies the tax rate on income earned on the sale of digital assets. It is important to note that the current rate on transactions is 20 percent, similar to standard assets. However, this would be reduced to 13 percent for Russian companies and 15 percent for foreign companies under the new law. Despite their approval, it needs to pass a review by the upper house and be signed by President Vladimir Putin to take effect as a law. 

Morocco working on a crypto regulation framework

Following in the footsteps of other countries that are trying to come up with regulatory certainty for cryptos, the head of Moroccan Central Bank Abdellatif Jouahri, disclosed that the country will soon present a crypto regulation framework bill for approval. According to him, they seek to review the Moroccan money laundering and anti-terrorism financial regulations in the country.

The central bank committee working on the bill is the Crypto Regulation Best Practices committee and according to the governor of Bank Al-Maghrib (BAM) Jouahri, both the International Monetary Fund (IMF) and the World Bank would be engaged to work out appropriate benchmarks for regulation.

In a bid to come up with the perfect legal framework, the country is in talks with the Central Banks of France, Sweden, and Switzerland on the best practices for the regulation.

Financial authorities in Morocco have always issued warnings on the risk that comes with the usage of cryptos. The supposed risk influenced the central bank’s decision to ban crypto trading. However, the bank admitted that the country may adopt the asset class in the future.