Ukraine to End Tax Breaks on Bitcoin Transactions

An updated bill on the regulation and taxation of virtual assets is set to be ready for consideration in the first quarter of 2025, according to a statement by the head of the tax committee of the Verkhovna Rada, Daniil Hetmantsev, as reported by Ekonomichna Pravda.

According to the deputy, the working group is finalizing the text of the document.

“I believe that the text, together with the National Bank and the IMF, will be ready after the New Year, and in the first quarter we will adopt this bill and legalize cryptocurrency,” Hetmantsev stated.

Lawmakers have decided against preferential taxation for cryptocurrency operations. They propose taxing the conversion of assets into fiat as profit, similar to securities.

“In consultations with European experts and the IMF, we are very cautious about using cryptocurrencies for tax breaks, as it could be a means of tax evasion in traditional markets,” Hetmantsev explained.

Previously, the official had already stated that preferential taxation of crypto operations in Ukraine would not be adopted.

Until specific regulations are established, tax is levied on the entire amount of sold cryptocurrency under the general taxation principle.

The enactment of the law “On Virtual Assets,” approved in 2021, has been postponed until the adoption of cryptocurrency taxation.

In November 2023, relevant amendments from the NSSMC were registered in the Verkhovna Rada. They proposed a rate of 18%, which faced public criticism.

An alternative document by the Ministry of Digital Transformation suggested a preferential tax with a phased increase from 5% to 18%.

Ultimately, the bill authored by Oleksandr Sova, a deputy from the Servant of the People party, was adopted as the basis.

The task of developing new cryptocurrency regulations is part of Ukraine’s National Revenue Strategy for 2024-2030 and included in the €50 billion reform plan.