Russia Gives Tax Incentives to Crypto Miners
In the most recent months, the cryptocurrency mining business has been met with moratoriums in several regions of the United States and Canada. Those who wish to invest in cryptocurrency mining may now take advantage of tax benefits offered by Russia. The new crypto mining facility in east Siberia, which will cost $12 million and get direct backing from the government, will open soon.
Buryatia is a republic located in east Siberia and is a part of the Russian Federation. According to the local media, the Corporation for the Development of the Far East, which is controlled by the state, has announced the start of the cryptocurrency mining facility in Buryatia.
The plant will have 30,000 mining equipment, will employ one hundred people, and will use one hundred megawatts of electricity from the local power system. It is going to open in the first half of 2023 and will be owned and operated by BitRiver, which is the leading provider of cryptocurrency mining colocation services in Russia.
The mining center will be eligible for a wide range of benefits, including exemption from land and property taxes as well as a reduction in the income tax rate. For the mine operator, there will be a fifty percent decrease in the cost of the power.
The legal position of Buryatia, which is that of a "territory of advanced development" — a special economic zone that is encouraged to attract national and international investments — might provide an explanation for the help that the government is providing. It is the mission of the Corporation for the Development of the Far East, a wholly owned subsidiary of the Ministry for the Development of the Far East and Arctics, to provide financial backing for various investment endeavors.
Since the beginning of war in Ukraine and the financial sanctions that followed it, the Russian government has altered its anti-cryptocurrency posture, especially with regard to mining. This change came about as a result of the conflict in Ukraine. Gazprom Neft, a state-owned gas company, and BitRiver entered into a cooperation in July 2022 so that Gazprom Neft could provide BitRiver with power produced from petroleum gas. As part of the collaborative effort, BitRiver has begun creating a digital infrastructure in the oil fields where Gazprom supplies flare gas for cryptocurrency mining operations. These fields are located in Russia.