Ukraine explains how Bitcoin transactions are taxed

The State Tax Service of Ukraine in Lviv region issued an explanation regarding the taxation of cryptocurrency operations for individuals.

Experts noted that cryptocurrency still lacks a clearly defined legal status in the country, leaving no regulatory framework for its classification and the regulation of related operations.

Nevertheless, the authorities say, funds obtained from cryptocurrency operations are taxable.

“Income received by an individual from selling cryptocurrency is included in the total annual taxable income as foreign income, if the source of payment of this income is foreign, or as other income if the payment of income is carried out by a resident individual on the territory of Ukraine,” the tax authorities said.

On 17 February 2022, the Verkhovna Rada adopted the updated law ‘On Virtual Assets’, regulating cryptocurrency operations within the country.

Subsequently, authorities said they intended to amend the regulatory act to align with European MiCA rules. MiCA.

The law will take effect after Parliament approves changes to the Tax Code concerning the taxation of the crypto market. When this will happen — unknown.