Cryptocurrency Taxation Planned by Ukraine
In his Telegram post, MP and deputy chairman of the parliamentary financial committee, Yaraslav Zheleznyak, mentioned that a draft law is under development to legalize cryptocurrencies. This initiative will reportedly be created by the National Securities and Stock Market Commission (NSSMC) along with the National Bank of Ukraine, with external assistance from the International Monetary Fund (IMF). The draft is expected to be presented by the end of December.
In addition to the crypto legislation, Zheleznyak communicated that changes in tax policies for industrial emissions and a review of the taxation for extractive industries can be anticipated post-war.
It's essential to acknowledge that cryptocurrency taxation varies across countries. For instance, in the United States and Australia, crypto owners face capital gains tax, whereas in Germany, cryptos are treated as distinct assets with unique tax rates. Similarly, in Portugal, crypto earnings are taxed based on their categorization, such as passive investments or self-employment income.
Notably, Ukraine's existing crypto taxation framework is in a transition phase. The proposed tax rates for crypto conversions or purchases involving fiat currency or goods/services are at a combined 23% (18% personal income tax and a 5% military levy). However, certain categories of transactions, like mining rewards or regulated exchange transactions, are subject to preferential rates. Furthermore, cryptocurrency-to-cryptocurrency trades, wallet transfers, gifts, and donations remain tax-exempt.
Although cryptocurrency taxation may seem connected to the proposed reforms for industrial emissions and extractive industries, there is no evident overlap in the provided sources, indicating that these reforms appear to be distinct legislative matters. The military levy, though, is explicitly geared towards defense efforts, and Ukraine seems to be seeking to align its crypto policies with those of countries like Germany, Switzerland, and Singapore.
- MP Yaraslav Zheleznyak, who is also the deputy chairman of the parliamentary financial committee, has communicated that changes in tax policies for industrial emissions and a review of the taxation for extractive industries can be anticipated post-war, aside from the ongoing initiative to legalize cryptocurrencies in Ukraine.
- Ukraine's proposed cryptocurrency taxation framework suggests a combined rate of 23% for crypto conversions, purchases involving fiat currency or goods/services, consisting of a personal income tax of 18% and a military levy of 5%.
- Cryptocurrency taxation in Portugal, like in various countries, is based on the categorization of earnings, such as passive investments or self-employment income.
- Despite potential similarities in finance-related reforms, the proposed cryptocurrency taxation reforms in Ukraine, as of the provided sources, appear to be distinct from the anticipated changes in industrial emissions and taxation for extractive industries. The military levy, however, partially aligns with Ukraine's approach to cryptocurrencies, as it's intended to support defense efforts.
