Ukraine proposes partial tax relief for cryptocurrency holders

The Public Union “Virtual Assets of Ukraine” (“VAU”), together with the inter-factional MPs’ group Blockchain4Ukraine, prepared two proposals to the recently introduced bill on taxing cryptocurrency operations, ForkLog reported by representatives of the organisations.

In particular, they called for exempting individuals and legal entities from taxes on income from virtual assets held on their balance sheets for more than a year. The approach, according to the organizers, is used in Germany for all categories of taxpayers and in the United States for taxpayers at tax rates of 10-12%.

Additionally, for a two-year transitional period from the market launch, they advocate a phased increase in tax rates on income from VA for individuals and corporate profits, starting at 5% in the first year and 10% in the second year.

According to them, this will help stimulate the crypto market to move out of the shadows, attract global players to Ukraine, and draw investments into the post-war recovery of the country’s economy.

«We advocate a regulatory model for the industry that will meet the mandatory EU requirements, but at the same time be as business-friendly as possible, taking into account the transitional period», said the head of Blockchain4Ukraine and VAU’s supervisory board, Alexey Zhmerenetsky.

The reception and discussion of remarks and amendments to the bills from members of the VA advisory council at the НКЦБФР will continue until June 30. Afterwards, authorities will submit their proposals for the document. The estimated date for registering the documents with the Verkhovna Rada is planned for August.

In June, the НКЦБФР presented a bill regulating the taxation of cryptocurrency operations in the country, and an updated text of the law “On Virtual Assets” with provisions implementing the European regulation MiCA.

Lawyers pointed to problems with the tax bill.