How to Get a Tax Deduction and Reduce Mining Income

🔹 For Individuals
Individuals engaged in mining can reduce their income by the amount of documented expenses incurred (Clause 2.3 of Article 210, Subclause 5 Clause 1, Subclause 2 Clause 2 of Article 220 of the Russian Tax Code).

Eligible expenses include:

• Purchase of mining equipment
• Electricity costs
• Equipment maintenance
• Rental of premises
• Other costs directly related to mining activities

Supporting documents:
✔️ Payment documents (receipts, invoices, bank statements) for equipment purchases
✔️ Documents confirming electricity payments (contracts, bills, payment orders)

How to claim the deduction:
Individuals must file a personal income tax return (3-NDFL) at the end of the tax year.
The deadline for submitting the 3-NDFL return in 2025 is April 30.

🔹 For Sole Proprietors (Individual Entrepreneurs, IE)
Sole proprietors engaged in mining can reduce their taxable income using a professional tax deduction (Clause 2.3 of Article 210 of the Russian Tax Code).

What is a professional deduction?
It’s the amount of expenses incurred in the course of business that reduces taxable income (Clause 1 of Article 221 of the Tax Code).

Eligible expenses include:

• Equipment purchases
• Electricity expenses
• Equipment maintenance
• Rent
• Other business-related expenses

How to claim the deduction:
Sole proprietors determine the list of deductible expenses themselves, in accordance with Chapter 25 “Corporate Profit Tax” of the Tax Code.
To apply the deduction, the IE must reflect it in their annual personal income tax return and factor it into the taxable base.

🔹 For Companies
Companies can deduct all mining-related expenses, including indirect ones, regardless of their nature (Clause 5 of Article 282.3 of the Tax Code).
This helps reduce the corporate profit tax base.

Deductible expenses include:

• Purchase of mining equipment
• Electricity payments
• Equipment maintenance and repairs

How to account for expenses:
All expenses must be documented (invoices, payment orders, contracts) and are considered when calculating corporate income tax.

Conclusion:
Using tax deductions allows individuals, sole proprietors, and companies to reduce their tax burden.
It’s important to prepare all required documents in advance and file tax returns on time to exercise your right to lower your taxable base.
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