Ukrainian top financial regulators are floating around the idea of taxing cryptocurrencies as personal income, potentially absurd and ridiculous sculptures supported by certain foreign assets under the newly proposed taxation procession issued on Tuesday.
In a translated letter introducing a potential new approach, Ruslan Magomedov, head of Ukraine’s National Securities and Stock Markets Committee, said effective tax policies are necessary steps to prevent financial abuse and promote “legal and responsible use of digital assets.”
“Establishing fair and understandable tax rules is also a prerequisite for attracting investments and integrating Ukrainian virtual asset markets into global financial markets,” Magomedov added.
Under the NSSMC’s proposed tax system, certain cryptocurrencies – essentially, the unstable cryptocurrencies were either cashed for Fiat currency or exchanged for goods or services, with no financial losses from transactions during that time – Ukraine’s standard personal income tax is taxed on a standard personal income tax of 18%.
Inter-crypto transactions are not subject to taxation under the proposed tax matrix. It handles crypto taxation in line with several other European countries, including Austria and France, as well as crypto-friendly jurisdictions like Singapore.
Because Ukrainian tax law exempts tax revenue generated from transactions with foreign exchange value, the NSSMC suggested that “it makes sense to consider priority tax rates or taxation on foreign asset support stubcoins and certain asset referenced tkens (art). The recommended priority tax rate under the matrix can be either 5% or 9%.
The Matrix also provided various taxable options for other types of crypto transactions, including mining proposed by the NSSMC. Staking, as the regulator said, could be “deemed a prisoner of business” or be taxed only during the cash-out phase. Like hard forks and airdrops, regulators may be taxed as normal income or only during the cash-out phase.
Ukraine previously introduced a bill in 2023 that would similarly amend the country’s tax laws to cover cryptocurrency. A 2024 analysis from the Swiss blockchain analytics company found that Ukraine could collect more than $200 million annual taxes from crypto transactions.
Ukrainian President Voldimir Zelensky officially legalized the country’s cryptocurrency sector in 2022, giving it a lead in determining industry regulators and creating specific regulations. The National Bank of Ukraine is currently based on bills based on crypto assets (MICA) regulations in the European Union (EU) market.