Ukraine Proposes 18% Tax on Bitcoin Transactions
The NSSMC of Ukraine has published a detailed taxation matrix for virtual assets. The recommendations draw on international experience and are adapted to Ukrainian legislation.
The head of the Verkhovna Rada Committee on Finance, Tax and Customs Policy, Daniil Hetmantsev, described the NSSMC’s published cryptocurrency taxation matrix in Ukraine as “detached from reality.”
“Unfortunately, the folks at NSSMC have once again misunderstood and published some ‘matrix’ of crypto taxation known only to them, which has no connection to reality. Pay no attention, this happens at the Commission at every turn. That’s precisely why we want adults to handle crypto,” wrote Hetmantsev.
According to him, the draft law on virtual assets is likely to be submitted to the Committee for first reading by the end of April.
The regulator proposes to consider net income (not payable in case of losses) and revenue (payable at the point of conversion to fiat) as taxable objects. The Commission notes the complexity of administration in the first case and the high tax burden in the second.
According to the standard EU approach, income is considered compensation received for goods/services or at the moment of alienation of virtual assets in exchange for other assets, including virtual ones. Another option is that no tax is levied on crypto-to-crypto exchanges.
The matrix suggests a standard personal income tax rate of 18% and an additional military levy of 5%.
As an alternative, the model includes preferential tax rates of 5% and 9% for certain categories. For example, it is proposed to apply such rates to authorized EMT and ART pegged to currency values. Additionally, they may be exempt from taxation along with ART pegged to bank metals.
The document also contains tax recommendations for mining, staking, airdrops, and hard forks. Actions such as free token distribution, token creation, and virtual asset storage will not be subject to VAT. However, VAT may be charged for rewards or services involving token modification or crypto payments.
“In the digital age, cryptocurrency taxation is no longer a hypothesis but a rapidly approaching reality,” commented NSSMC head Ruslan Magomedov.
Previously, the Commission presented the matrix to lawmakers and now plans to engage directly with market participants in developing regulatory frameworks.
The implementation of the law “On Virtual Assets,” approved in 2021, has been postponed until the adoption of cryptocurrency taxation.
According to the new bill, Ukraine will forgo tax incentives for bitcoin transactions. The document is expected to be adopted in the first half of 2025.
The task of developing cryptocurrency regulation is part of Ukraine’s National Revenue Strategy for 2024-2030 and the €50 billion reform list.
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