Ukraine is considering introducing a personal income tax of up to 23% on cryptocurrency under a new proposed tax system
Under the proposal, certain cryptocurrency transactions would be taxed at the country's base rate of 18%, plus an additional 5% levy to fund the war effort.
By: Kamomile Shumba, Cheyenne Ligon | Edited by Jesse Hamilton Apr 9, 2025 7:15 PM
What is important to know:
- Ukraine's top financial regulator has proposed taxing most cryptocurrencies as personal income, with possible exceptions for stablecoins backed by foreign assets.
- The planned tax scheme includes an 18% income tax for individuals and an additional 5% military levy on certain cryptocurrency transactions.
- Cryptocurrency-to-cryptocurrency transactions are not subject to taxation, which is in line with the practice of European countries such as Austria and France.
Ukraine's top financial regulator has put forward an initiative to tax cryptocurrencies as personal income, with possible exceptions for some foreign-asset-backed stablecoins, according to a newly proposed tax matrix published Tuesday.
In a letter outlining a potential new approach, Ruslan Magomedov, head of Ukraine’s National Securities and Stock Market Commission, said effective tax policy is an important step to prevent financial abuses and promote “the legitimate and responsible use of digital assets.”
“The formation of fair and clear tax rules is also a necessary condition for attracting investment and integrating the Ukrainian virtual asset market into the global financial market,” Magomedov added.
Under the tax scheme proposed by the NCSSM, certain cryptocurrency transactions (primarily those in which non-stablecoin cryptocurrencies are cashed out into fiat currency or exchanged for goods or services and in which there was no financial loss from the transaction) would be taxed at the standard personal income tax rate in Ukraine of 18%, plus an additional 5% wartime levy that was introduced last December.
Under the proposed tax matrix, cryptocurrency transactions would not be taxed, which is in line with the taxation practices of cryptocurrencies in a number of other European countries, including Austria and France, as well as friendly jurisdictions such as Singapore.
Since the Tax Code of Ukraine exempts any income received from operations with foreign currency assets from taxation, the NCSSM proposed to “consider the possibility of a preferential rate or tax exemption” for stablecoins backed by foreign assets and certain asset-linked tokens (ART). The proposed preferential tax rate, according to the matrix, could be 5% or 9%.
The matrix also offers various tax options for other types of cryptocurrency transactions, including mining, which the NSSMC says could be considered a “business activity”; staking, which the regulator says could be “treated as business income” or taxed only at the withdrawal stage; and hard forks and airdrops, which the regulator says could be taxed as ordinary income or taxed only at the withdrawal stage.
Earlier, Ukraine presented a bill introducing similar amendments.
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