The Ukrainian government is advancing a proposal to impose new taxes on cryptocurrency earnings, marking a notable policy shift in its digital economy. The legislation, currently under review by parliament, would see crypto profits taxed for the first time in the country’s history.
Under the proposed system, individuals earning income from crypto would be subject to an 18 percent personal income tax. An additional 5 percent military levy would support national defense efforts amid the ongoing conflict with Russia.
According to officials, the tax framework aims to provide clarity for both individuals and businesses operating in the crypto space. It will cover various digital asset activities, including mining, staking, airdrops, and certain token modifications.
The Ministry of Finance has outlined two taxation methods that may apply to crypto income. One approach would tax net income after deducting expenses, while the other would use a fixed rate for gross earnings. Lower tax rates of 5 percent or 9 percent could apply depending on how the income is categorized.
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Traders to Benefit from Crypto-to-Crypto Tax Exemption
A key element of the proposed law is the exemption of crypto-to-crypto trades from taxation. This development is expected to benefit digital asset traders who frequently exchange one cryptocurrency for another.
According to the bill, taxes only apply when crypto is converted to fiat currency or used to purchase physical goods and services.
Government regulations state that maintaining cryptocurrencies creates no tax liability for citizens. Entitlement to tax obligations exists only for transactions that occur through fiat exchanges or real-world purchases.
Value Added Tax (VAT) applies to select crypto-related transactions and income tax. Using crypto to pay for goods and services alongside staking rewards and selected token operations triggers tax responsibilities. Ukraine is reviewing its VAT Directive to introduce VAT exemptions, but its plans have not yet been formally announced.
The National Bank of Ukraine continues to work on establishing regulatory guidelines that will cover digital assets. According to the European Union’s Markets in Crypto-Assets (MiCA) directive, the regulations will become effective in October 2025.
If passed, the law will end Ukraine’s previous hands-off approach to crypto taxation. The government expects the new rules to support transparency, improve regulatory oversight, and boost tax revenue in a time of national need.
Conclusion
The proposal to tax crypto profits reflects Ukraine’s evolving stance on digital assets amid economic pressures from ongoing conflict. Authorities are moving toward structured regulation that aligns with European standards while addressing the fiscal demands of wartime governance. The final decision on the bill is expected in the coming months.
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