Ukraine proposes tax on cryptocurrencies

A new bill submitted for approval in Ukrainian Parliament has proposed a new tax on cryptocurrencies. This has resulted in raised eyebrows, because the legal status of cryptocurrencies is not yet clear in the country. This draft proposal of the bill was submitted by a group of 23 MPs. According to the bill, it is aimed at bringing out of the shadow economy a large volume of operations with cryptocurrencies and pumping up the state budget. In particular, the deputies propose to impose a 5 per cent tax on the profits of individuals related to transactions with cryptocurrencies. The profit of company involved into operations with cryptocurrencies, is also proposed to be taxed at a rate of 5 per cent until 1 January 2024. However, after this date, the rate should increase immediately to 18 per cent.

Authors of the bill in the explanatory note to the document provided a rather bold forecast. According to their calculations, the bill will help to attract an additional UAH 1.27 billion annually to the state budget during 2019–2024.

It is worth noting that neither Ukrainian government nor the National Bank has yet defined legal status and regulation for cryptocurrencies.

“To date, alas, the issue of legal settlement of the cryptocurrency is still open. Many believe that cryptocurrency is illegal, and this is the most common myth. Cryptocurrencies are not officially prohibited at the moment in Ukraine. Thus, it is incorrect to say that cryptocurrencies are illegal, if you follow the rule: “everything that is not forbidden is allowed,” said Pavel Moroz former Deputy Minister of Justice.

It is worth mentioning, that this is not the first attempt to provide tax regulation for cryptocurrencies in Ukraine.