Ukraine is set to legalize cryptocurrency by the first quarter of 2025, taking a significant step toward regulating its digital economy. However, the country has clarified that it will not offer tax exemptions for cryptocurrency transactions.
Danylo Hetmantsev, head of Ukraine’s Parliamentary Committee on Finance, Tax, and Customs Policy, revealed that a parliamentary group is finalizing the first draft of a cryptocurrency law. Developed in collaboration with the National Bank and the International Monetary Fund (IMF), the draft is expected to be ready shortly after the New Year.
Hetmantsev is confident that the legislation will be passed, making cryptocurrency legal in Ukraine by early 2025.
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Taxation Modeled on Securities
Hetmantsev noted that there will be no tax exemptions for cryptocurrency. Taxation will follow the model used for securities, with profits taxed when assets are converted into currency.
Hetmantsev explained that, after consulting with European experts and the IMF, they are taking a very cautious approach to using cryptocurrencies for tax exemptions, as this could potentially lead to tax evasion in traditional markets.
Final Step to Legalization
In November 2023, Ukraine’s parliament registered a draft law on the taxation of virtual asset transactions. Once this law is adopted, it will complete the process of legalizing cryptocurrencies in Ukraine, opening the door to a new regulated digital asset framework.
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The countdown to 2025 begins, as Ukraine prepares to join the growing list of nations embracing regulated digital assets.
FAQs
Ukraine is cautious to avoid tax evasion, consulting with European experts and the IMF before considering crypto tax exemptions.
