- Ukraine proposes an 18% crypto tax to support the military and state budgets.
- The new Ukrainian tax framework simplifies rules for crypto transactions and mining.
Ukraine is moving forward with regulating cryptocurrency taxation. The National Securities and Stock Market Committee (NSSMC) has proposed a detailed framework to tax crypto gains. The move establishes necessary baseline rules for virtual assets that should function in the country.
Ukrainian Tax Proposal Aims to Simplify Crypto Transactions and Mining Rules
The proposal was revealed through Telegram by Ruslan Magomedov, who serves as the chairman of the NSSMC. Individuals must pay an 18% personal income tax on their profits when they trade cryptocurrencies, according to the draft. The proposed framework also includes a 5% military tax requirement. The military tax operates as a critical wartime measure that Ukraine uses to fund its defensive initiatives.
The plan provides selected categories with tax rate choices consisting of 5% and 9% when specific requirements are met. The introduced rates draw their inspiration from global best practice examples while being modified to conform with Ukrainian legislation.
Taxable income would be calculated from two possible methods: total income or net income, which takes into account deductible expenses. Virtual currency taxation applies to payment receipt and asset-to-currency trades that lead to non-virtual product acquisition. Transactions from virtual assets alone do not require tax compliance. Tax authorities would not apply tax rules to crypto-to-crypto trading because it operates independently from traditional taxation systems.
The proposal simplifies taxation procedures by providing specific guidelines for mining operations, together with staking functions, along with free crypto distribution programs and network upgrading procedures. The creation of tokens and virtual asset storage activities will leave VAT taxes unaffected. Both token modifications and cryptocurrency payments for goods or services may become taxable under this proposed framework. The framework enables the government to follow crypto activity better while delivering specific guidelines for companies together with investors.
Moreover, some transactions could be exempt from tax under Article 135 of the EU VAT Directive, especially those related to payment services. However, the NSSMC recommends additional legal definition and clarification regarding the classification of such transactions.
Ukraine Prioritizes Crypto Tax for National Security
The Ukrainian government continues to advance cryptocurrency taxation because it aims to establish legal frameworks for crypto market oversight. Ukraine initiated plans to legalize cryptocurrency in February. The regulatory guidelines will start taking effect during the summer 2025. Lawmaker Danylo Getmantsev announced the completion of the ongoing legislation structure between ongoing discussions regarding tax rules and financial oversight. The Ukrainian government demonstrates its dedication to converting cryptocurrency into the official economic system through these initiatives.
The proposal serves two primary purposes to tax cryptocurrency and establish financial regulations to integrate it into the standard financial structures. The state plans to manage digital assets by supporting both military funding and the state budget while providing fair tax rules for cryptocurrency use. Ukraine advances toward digital economic integration by adopting new proposals to manage digital assets between financial requirements and security objectives.
The ongoing digital asset strategy in Ukraine will take shape using this legislative proposal to determine cryptocurrency regulations within the country’s boundaries. The cryptocurrency regulatory framework in Ukraine could inspire additional nations to develop comparable frameworks for taxing digital assets.
