Ukraine introduces cryptocurrency taxation rules for digital transfers

The State Tax Service of Ukraine has published clarifications on the taxation of cryptocurrency transactions for Ukrainians.

According to the tax authority, cryptocurrencies in Ukraine still do not have a specific legal status, so there is no regulatory framework for their classification and control of crypto transfers. Nevertheless, money received by citizens from cryptocurrency transactions is subject to taxation.

«Income received by an individual from the sale of cryptocurrency is included in the total annual taxation as foreign income,» the tax office said in a statement.

The taxation of foreign income is described in Article 170 of the Tax Code of Ukraine: «The amount of such income shall be included in the total annual taxable income of the payer, subject to personal income tax (18%) and military duty (1.5%).»

Despite the temporary absence of a regulatory framework, cryptocurrencies are popular in Ukraine. Over the past year, revenues to pro-Ukrainian blockchain wallets have increased by more than $ 212 million. According to the analytical company Elliptic, Ukrainians collected 44 times more cryptocurrency donations than representatives of the terrorist country. According to experts, Ukraine has already won the crypto war with Russia.

As a reminder, Ukraine ranked third in the rating of cryptocurrency acceptance by the population. According to Tripple A, a research company, the percentage of Ukrainians owning digital assets increased by more than 2% over the year. Thus, at the beginning of 2022, 15.72% of the population, or 6 million people, owned cryptocurrency.

Despite the very difficult time for all citizens of our country, Ukrainians remain optimistic about their investments in crypto: they believe that bitcoin will go up, and after fixing their profits, they do not plan to leave the crypto market forever.