Ukraine Crypto Tax Plan Proposes 23% on Certain Transactions

Ukraine Crypto Plan: 23% Tax Proposed, Tax-Free For Small Users

Ukraine Proposes 23% Tax on Some Crypto Income

Ukraine's financial watchdog has proposed a new tax plan for crypto users. The plan suggests taxing profits from some transactions at a total rate of 23%. This includes an 18% income tax and a 5% military levy.

The new proposal, from Ukraine National Securities and Stock Market Commission (NSSMC), was released on April 8 as a 32-page white paper. It aims to create clear rules for taxing digital assets.

Crypto-to-Crypto Trades Not Taxed

The tax would apply when crypto is exchanged as fiat money or used to buy goods and services. But if the user trades one cryptocurrency for another, they won’t be taxed. This brings Ukraine in line with other crypto-friendly countries like Austria, France, and Singapore.

Stablecoins might also be excluded or taxed at a lower rate. The NSSMC says stablecoins backed by foreign currencies are similar to “foreign exchange values,” which are already tax-free under Ukraine’s current rules.

Mining, Staking, Airdrops in Focus

The proposal also looks at how to charge for mining, staking, airdrops, and hard forks. Mining is treated like a business. But small miners might get a tax-free limit. Staking could be taxed only when the tokens are turned into fiat money. Another option is to count staking as business income.

Airdrops and hard forks might be taxed right away or only when the tokens are sold. These activities are hard to track because they often happen on decentralized platforms. Many users also don’t have proof of how they got their tokens. 

Problems With Proof and Paper Profits

The white paper also highlights another issue: users often can’t prove what they paid to get tokens. This happens a lot with peer-to-peer trades, mining, and airdrops.

The value of cryptocurrencies also changes quickly. This means someone could owe taxes on paper profits, only to see the market crash soon after.

To help users, the regulator suggests better reporting systems and digital tools. It wants to make it easier for people to understand and follow the rules.

Call for Clear Rules and Tools

The NSSMC says crypto taxes are “not a hypothesis, but a reality that is fast approaching.” It wants lawmakers to understand the pros and cons of each part of the plan before making final decisions.

One big challenge is the anonymous nature of crypto. Many users store assets in self-hosted wallets. This makes it hard for charging authorities to monitor transactions.

The proposal also looks at easing the burden on small users. There could be no charges on cryptocurrency gifts or donations between family members. People who hold their coins for a long time might also avoid taxes. A tax-free limit may be introduced to support small investors. Trump to consider zero crypto tax on less than $44,626, which adds another layer of interest to global charges discussions.

However, not all traders may benefit from Ukraine tax breaks. Non-custodial wallets—where users fully control their crypto—might not be eligible. This could limit how widely these exemptions apply, especially among everyday users managing their assets.

Next Steps for Ukraine Crypto Law

Ukraine is working toward a regulated cryptocurrency market. President Volodymyr Zelenskyy signed a law back in March 2022.

A new bill to fully legalize cryptocurrencies is still under review. Daniil Getmantsev, who heads the parliament’s tax committee, said last year that the bill would be finished soon. For now, the NSSMC’s plan is a big step toward setting up a fair and modern tax system for digital assets in Ukraine.