Ukrainian regulators are prepared to start taxing crypto gains at 18% from 2024, with lawmakers set to vote on proposals this fall.
Per Forbes Ukraine, the National Commission for Securities and the Stock Market is set to unveil a draft law, which will be set before lawmakers at the next parliamentary session.
The market regulator’s proposals include creating a flat-rate 18% tax on “income” from crypto “investments,” but military servicepeople will only need to pay 1.5%.
Commission member Yuriy Boyko said:
“We hope that the law will be adopted in September, and will come into force in 2024.”
The commission also proposes granting itself and the central bank regulatory powers over the sector.
The draft law would also require all Ukrainian crypto exchanges and brokerages to apply for commission-issued operating permits.
Kyiv has been attempting to modify its crypto regulations in line with the EU in recent weeks, and wants to introduce regulations in the spirit of the EU’s Markets in Crypto-Assets (MiCA) legislation.
Boyko said:
“The [draft law] makes it possible to work according to EU rules. If an exchange or a [crypto trader] wants to operate in the market, they must comply with these rules.”
Crypto Community Displeased with Ukraine’s 18% Tax Plans?
The news was met with a mixed reaction from the nation’s crypto community.
Mykhailo Chobanyan, the founder of the Kuna crypto exchange, warned that Kyiv should not rush into action.
Chobanyan said that it was “necessary” to find out “why, how, and when regulation” is needed before legislating.
And the media outlet Forklog quoted a legal expert as opining that a tax rate of 18% could deter investors, and possibly “provoke an outflow of users and [crypto] companies from Ukraine.”
The central bank, meanwhile, has called for regulations that “balance the need to protect the interests of consumers” with “financial stability.”
The bank added that regulations should “take into account the peculiarities of the nation’s legal and financial system.”
Ukraine is planning to introduce a 18% tax on crypto gains from 2024. The law, which is still being finalized, would also require cryptocurrency exchanges to register with the government and collect taxes on behalf of their users.
The proposed tax would apply to both individuals and businesses that earn income from cryptocurrency trading or mining. It would not apply to gains from holding cryptocurrencies for investment purposes.
The Ukrainian government is hoping that the new tax will help to regulate the cryptocurrency industry and generate much-needed revenue. The country is currently facing a financial crisis due to the ongoing war with Russia.
The proposed tax has been met with mixed reactions from the cryptocurrency community. Some people believe that it is a necessary step to bring the industry into the mainstream, while others argue that it is too high and will discourage investment.
Only time will tell how the new tax will affect the Ukrainian cryptocurrency industry. However, it is clear that the government is serious about regulating the space and generating revenue from it.
Here are some additional details about the proposed tax:
- The tax would be applied to all cryptocurrency gains, regardless of whether they were made in fiat currency or another cryptocurrency.
- The tax would be due on a quarterly basis.
- Cryptocurrency exchanges would be required to collect taxes on behalf of their users.
- The government would provide a tax exemption for gains from cryptocurrency mining that are used to offset expenses related to mining.
The proposed tax is still being finalized, so it is possible that some of the details may change before it is implemented. However, it is clear that the Ukrainian government is serious about regulating the cryptocurrency industry and generating revenue from it.
