The leading financial authority in Ukraine is considering the introduction of taxes on cryptocurrency as personal income, with specific exceptions possibly for certain foreign asset-backed stablecoins, according to a newly unveiled taxation framework made public on Tuesday.
In a translated correspondence presenting this potential new strategy, Ruslan Magomedov, the chair of Ukraine’s National Securities and Stock Market Commission (NSSMC), highlighted that implementing a robust tax policy is essential to combat financial misconduct and promote the “legal and responsible use of digital assets.”
“Creating clear and equitable taxation guidelines is also vital for attracting investments and integrating Ukraine’s virtual asset market into the international financial system,” Magomedov remarked.
Under the proposed tax framework by the NSSMC, specific cryptocurrency transactions—primarily those where non-stablecoin cryptocurrencies are converted into fiat currency or utilized for goods and services without incurring financial losses—would be taxed at Ukraine’s regular personal income tax rate of 18%, along with an added 5% wartime tax that has been in effect since last December.
Crypto-to-crypto transactions would remain tax-exempt under this suggested taxation framework, which aligns with the practices seen in several other European nations such as Austria and France, along with jurisdictions that are favorable to crypto, like Singapore.
Considering that Ukraine’s tax regulations currently exempt income derived from foreign exchange transactions from taxation, the NSSMC proposed that “it would be reasonable to assess a preferential tax rate or exclusion for foreign asset-backed stablecoins and specific asset-referenced tokens (ARTs).” The proposed preferential tax rate within this framework could be set at either 5% or 9%.
The framework also outlined different tax implications for other forms of cryptocurrency transactions, including mining, which the NSSMC suggested could be classified as a “business activity”; staking transactions which might be seen as either “business captive income” or taxed only when cashed out; and situations like hard forks and airdrops, which could be taxed as regular income or only when cashing out.
Earlier this year, Ukraine had presented a draft law to amend its tax code to accommodate cryptocurrency regulations. An analysis from a Swiss blockchain analytics firm in 2024 showed that Ukraine could potentially collect over $200 million annually from taxes on cryptocurrency transactions.
Ukrainian President Volodymyr Zelensky officially acknowledged the legitimacy of the cryptocurrency sector in 2022 and authorized industry regulators to create specific regulations. The National Bank of Ukraine is in the process of drafting a law inspired by the European Union’s Markets in Crypto Assets (MiCA) regulations.
Since 2022, Ukraine has been a candidate for membership in the European Union.
Comment was sought from the NSSMC regarding this proposal.