Ukrainian regulator announces date of adoption of law on cryptocurrencies

Ukraine has made an important step towards regulating the cryptocurrency market: a draft tax matrix for virtual assets has been published. The document was initiated by the National Securities and Stock Market Commission (NSSMC). According to the proposal, profits from cryptocurrency transactions are to be subject to an 18% personal income tax and a 5% military duty.

The draft document was presented by the chairman of the commission Ruslan Magomedov on his Telegram channel. He emphasized that in the digital era, cryptocurrency taxation is no longer a hypothesis, but a fast-approaching reality. In addition to the basic taxation, the matrix also contains proposals for preferential rates — 5% and 9% - for certain categories of transactions adapted to Ukrainian legislation.

The document describes in detail how taxable income is determined: either as gross income or as net profit after deducting expenses. The tax will be paid when income is received or assets are exchanged for fiat money or goods. At the same time, transactions between virtual assets without conversion to fiat will not be taxed.

The matrix contains references to the practices of other countries. For example, Austria and France do not tax cryptocurrency-to-cryptocurrency exchanges, and Singapore has no capital gains tax. Malaysia does not tax crypto income if the transactions are not systematic, and Georgia completely exempts individuals from taxation of income and capital gains from digital assets.

Special attention is paid to such operations as mining, staking, airdrops and hard forks. In particular, the supply of tokens, creation or storage of assets will not be subject to VAT. At the same time, rewards or services related to the exchange of tokens or payment for goods with cryptocurrency may be subject to taxation. The Commission also notes that some of these transactions may fall under the exemptions in Article 135 of the EU VAT Directive. In the near future, the Commission plans to consult with market participants and legislators to finalize the regulation.