Ukraine Plans to Tax Crypto by 18%

As the war with Russia rages on, Ukraine is turning its attention to something less visible but increasingly powerful—cryptocurrency. In a move that could change the way digital assets are handled across the country, the government is pushing forward a plan to tax crypto earnings. It’s a big shift for a sector that, until now, operated in a largely tax-free zone. The plan is currently under review in parliament.

If approved, the law would impose an 18% income tax on crypto profits, along with a 5% military levy. This would bring much-needed clarity to how crypto earnings are taxed in Ukraine.

Here’s a breakdown of everything you need to know.

How Will the Crypto Tax Work?

Under the proposed system, individuals involved in crypto activities could face:

• 18% personal income tax
• 5% military levy

In some situations, lower rates of 5% or 9% may apply, depending on how the income is earned and classified.

The tax will apply to a wide range of crypto activities, including mining, staking, and airdrops.

Investors will be taxed based on one of two methods:

• Net Income Taxation – Total revenue minus expenses will be taxed.
• Gross Revenue Taxation – A fixed tax will apply to all earnings before deductions.

Good News for Traders!

However, there’s a silver lining—crypto-to-crypto trades will remain tax-free, a relief for traders who frequently swap digital assets. This exemption aligns Ukraine with other crypto-friendly nations such as Austria, France, and Singapore, where digital asset swaps remain tax-free.

The government has confirmed that simply holding cryptocurrency will not result in taxes. Taxes will only apply when crypto is exchanged for fiat currency (like the hryvnia or dollar) or for physical goods and services.

Some Transactions Will Include VAT

Not all crypto activity will escape taxation. Some uses of crypto will be subject to Value Added Tax (VAT), such as:

• Using crypto to pay for goods or services
• Earning staking rewards or receiving digital asset transfers
• Modifying tokens in a way that creates new cryptocurrencies

However, certain transactions may qualify for VAT exemptions under the EU VAT Directive.

What’s Next for Crypto Regulation in Ukraine?

The Ministry of Finance and tax authorities are currently reviewing the proposal, with a final decision expected soon. In the meantime, the National Bank of Ukraine is developing a broader set of crypto regulations, based on the European MiCA directive. These are expected to take effect by October 2025.

If the bill passes, it could mark the end of Ukraine’s tax-free approach to crypto. Investors may need to rethink their strategies to adapt to the new rules once they take effect.

The honeymoon phase for crypto in Ukraine might be over—now comes the paperwork and the fine print.

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