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Ukraine’s National Securities and Stock Market Commission (NSSMC) has unveiled a comprehensive taxation framework for cryptocurrencies, aimed at modernizing the nation’s economy and fostering greater crypto adoption. This new matrix offers much-needed clarity on how various crypto-related activities, including mining, staking, and airdrops, will be taxed. It comes at a critical time, as Ukraine faces ongoing military and economic challenges due to Russia’s invasion, pushing the country to accelerate its shift toward digital assets.
The proposed tax framework is designed to align with global practices and provide a clear structure for crypto taxation in Ukraine. It introduces an 18% personal income tax on crypto transactions, coupled with a 5% military levy. However, preferential tax rates of 5% and 9% may apply to specific transactions under certain conditions. Notably, crypto-to-crypto exchanges are excluded from taxation, offering relief to traders and investors. Only exchanges of cryptocurrencies for fiat currency or non-virtual goods and services will be subject to tax.
This taxation matrix also provides a distinction between taxable and non-taxable events, allowing the country to focus on activities that align with global tax practices. Depending on the nature of the transaction, taxable income may be calculated either as gross revenue or net income. Additionally, income can be recognized at various stages, such as when an asset is received, exchanged for fiat, or used as compensation for services.
Drawing inspiration from global best practices, Ukraine’s framework mirrors aspects of crypto-friendly jurisdictions like Singapore, where digital assets are exempt from capital gains tax, and Austria, which does not tax crypto-to-crypto exchanges. Activities like mining and staking are exempt from VAT treatment, although payments in crypto for goods and services may be subject to VAT under EU regulations.
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As Ukraine continues to modernize its crypto ecosystem, the NSSMC is preparing draft legislation based on the new matrix, which has already been presented to the parliamentary finance committee. Alongside this, the National Bank of Ukraine is working on separate legislation to clarify the division of regulatory powers over the crypto industry, with plans for completion by October 2025. Together, these initiatives mark a significant step toward integrating cryptocurrency into Ukraine’s formal economy and aligning it with European Union standards.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
I’m a crypto enthusiast with a background in finance. I’m fascinated by the potential of crypto to disrupt traditional financial systems. I’m always on the lookout for new and innovative projects in the space. I believe that crypto has the potential to create a more equitable and inclusive financial system.
