Russia Proposes VAT on Mining Equipment Rentals to Overseas Firms

According to PANews, the Russian Ministry of Finance is planning to impose a value-added tax (VAT) on companies renting out mining equipment or data centers to overseas enterprises and mining pools. This new regulation will also apply to energy companies providing electricity to foreign mining firms. The ministry aims to clarify the taxation process for leasing mining equipment and establish tax rules for companies offering 'mining power' to non-Russian clients. VAT may be applicable on real-time, monthly, or annual rental bills, as current regulations lack clear explanations, causing difficulties for businesses in filing returns. A Russian law that came into effect in January this year mandates all industrial-level miners and 'mining infrastructure operators' (MIO) to register in a national directory. As of April 1, 116 MIOs and 606 industrial miners have completed registration, but the Federal Tax Service (FTS) believes many companies are still non-compliant. The FTS manages this directory and is currently developing guidelines for taxing the annual profits of mining companies and MIOs.