Ukraine’s Parliament Advances Cryptocurrency Legalisation Bill

Ukraine's parliament advances cryptocurrency legalisation bill.

On September 3rd, the Verkhovna Rada of Ukraine approved in the first reading the draft law No. 10225-d “On Virtual Assets Markets,” which will define the status and taxation of cryptocurrencies in the country. The document was supported by 246 deputies.

The taxable object will be the profit gained from operations with virtual assets over the year—the difference between income from sales and expenses on their acquisition. This will be included in the total taxable income at a rate of 18%. In the first year of the law’s effect, a preferential rate of 5% will apply to fiat exits.

The following are exempt from taxation:

• income from operations exchanging virtual assets for other virtual assets;
• the amount of income from the sale of virtual assets, if it does not exceed the size of one minimum wage established on January 1st of the reporting year;
• the value of virtual assets received as a result of their issuance, in exchange for personal data or gratuitously.

Regulation and oversight of activities in virtual assets markets will be carried out by the National Bank and another yet-to-be-determined regulator.

The latter will have broad powers, including:

• requiring any individuals or legal entities to provide information and documents important for oversight;
• conducting on-site inspections and investigations;
• gaining access to premises and documents, except for individuals’ residences;
• freezing assets, seizing property and/or funds by court order.

According to Yaroslav Zheleznyak, a member of parliament, numerous amendments will be made to the document before the second reading.

Back in April, the tax committee reviewed the draft law “On Virtual Assets” and recommended it for the first reading in the Verkhovna Rada.

Later, President Volodymyr Zelensky’s office blocked the consideration of the bill on cryptocurrency regulation in the country.

Experts believe that legalising the industry will bring Ukraine $10 billion.

Meanwhile, the National Bank of Ukraine has so far refused to create a bitcoin reserve in the country.