Cryptocurrency owners in Ukraine may be partially exempt from taxes

The Public Union «Virtual Assets of Ukraine» (VAU), together with the inter-factional association of MPs Blockchain4Ukraine, has prepared two proposals to the draft law on taxation of cryptocurrency transactions in Ukraine.

In particular, the organizations jointly advocated for the exemption of individuals and legal entities from paying taxes on cryptocurrency income held in their accounts for more than a year. According to public figures, this approach is widely used in Germany for all categories of the population. The United States also has a similar experience for taxpayers with rates of 10−12%.

After the final legalization of crypto assets in Ukraine, the UAA and Blockchain4Ukraine insist on a transition period of up to two years. According to the plan, the tax rate should not exceed 5% during the first year and 10% during the second year. According to representatives of the organizations, this will encourage the cryptocurrency market to come out of the shadows, ensure the arrival of global players in Ukraine, and attract investment in the post-war economic recovery.

«We stand for a model of industry regulation that will meet the mandatory requirements of the EU, but at the same time will be as favorable as possible for business development given the transition period,» said Oleksiy Zhmerenetsky, Head of Blockchain4Ukraine and Supervisory Board of Vau.

Yesterday, on June 14, it became known that Ukraine may legalize cryptocurrencies in the fall by introducing an 18% tax on investment income and a 1.5% military tax. If the Verkhovna Rada approves it, the bill will come into force in 2024. The document stipulates that the National Bank of Ukraine (NBU) and the National Securities and Stock Market Commission (NSSMC) will be the regulators of the cryptocurrency market in Ukraine.