Ukraine’s high monetary regulator is floating the thought of taxing cryptocurrency as private revenue, with potential carveouts for sure international asset-backed stablecoins, beneath a newly proposed taxation matrix printed on Tuesday.
In a translated letter introducing the potential new method, Ruslan Magomedov, head of Ukraine’s Nationwide Securities and Inventory Market Fee, stated that efficient tax coverage is a crucial step in stopping monetary abuse and facilitating the “authorized and accountable use of digital belongings.”
“Establishing honest and comprehensible taxation guidelines can be a prerequisite for attracting funding and integrating the Ukrainian digital asset market into the worldwide monetary market,” Magomedov added.
Underneath the NSSMC’s recommended tax scheme, sure crypto transactions — primarily these through which non-stablecoin cryptocurrencies are cashed out for fiat forex or exchanged for items or companies, and through which there have been no monetary losses from the transaction — could be taxed at Ukraine’s customary private revenue tax price of 18%, plus the extra 5% wartime levy that went into impact final December.
Crypto-to-crypto transactions wouldn’t be topic to taxation beneath the proposed tax matrix, which is in keeping with how a number of different European international locations together with Austria and France, in addition to crypto-friendly jurisdictions like Singapore, deal with crypto taxation.
As a result of Ukraine’s tax code exempts any revenue generated from transactions with international change values from being taxed, the NSSMC recommended “it is sensible to think about a preferential price or exemption from taxation” for international asset-backed stablecoins and sure asset-referenced tokens (ARTs). The recommended preferential tax price beneath the matrix may very well be both 5% or 9%.
The matrix additionally supplied quite a lot of taxation choices for different forms of crypto transactions, together with mining, which the NSSMC recommended may very well be thought-about a “enterprise exercise”; staking, which the regulator stated may both be “thought-about as enterprise captive revenue” or taxed solely on the cash-out stage; in addition to hard-forks and airdrops, which the regulator stated may both be taxed as peculiar revenue or solely on the cash-out stage.
Ukraine had beforehand launched a draft legislation equally amending the nation’s tax code to cowl cryptocurrency in 2023. A 2024 evaluation from Swiss blockchain analytics agency World Ledger discovered that Ukraine may stand to gather over $200 million in annual taxes from crypto transactions.
Ukrainian President Volodymyr Zelensky formally legalized the nation’s cryptocurrency sector in 2022, figuring out the business’s regulators and giving them the go-ahead to create particular rules. The Nationwide Financial institution of Ukraine is at the moment engaged on a draft legislation based mostly on the European Union’s (EU) Markets in Crypto Belongings (MiCA) regulation.
Ukraine has been a candidate for EU membership since 2022.
CoinDesk reached out to the NSSMC for a remark.
