Ukraine introduces crypto taxation bill, which aims to promote the development of the digital currency-related activity in the country. Ukrainian authorities plan to impose a five percent tax on individuals and legal entities that operate with virtual currencies.
18 September, AtoZ Markets – The parliament of Ukraine, the Verkhovna Rada, reportedly proposed a bill that is related to the cryptocurrency taxation laws in the country. Once passed into law, the bill would tax operations with cryptocurrency assets. The draft law was published on the official website of the parliament.
Ukraine Introduces Crypto Taxation Bill
The tax bill was initiated by 23 government officials. It suggests a five percent tax on individuals and legal entities that operate with virtual currencies, including tokens and cryptocurrencies.
According to some of the online reports, cryptocurrency related profits by businesses would be taxed at 18 percent, starting from January 1, 2024. This rate is a normal tax rate for corporate and personal income in Ukraine.
In addition, the new Ukrainian bill intends to withdraw large volumes of operations from the grey market in order to increase state budget revenues. It plans to do so by adding a brand new type of profit to the legislation. The new bill also looks into the encouraging the development of cryptocurrency-related activity in Ukraine. There is an explanatory note that is complementing the bill. It states:
“Accordingly, the introduction of transactions with virtual assets in the legal field will [make it possible] to draw 1.27 billion hryvnia ($43 million) to the budget annually from 2019-2024.”
Legal Status of Crypto in Ukraine
As of the moment, there is no valid legal regulation for cryptocurrencies in Ukraine. Back in September 2017, the Ukrainian Cabinet of Ministers on the Financial Stability Board called for the conclusion of the legal status of cryptocurrencies in the country. As a matter of fact, the Ukrainian Cabinet of Ministers on the Financial Stability Board operates under the parliament of Ukraine.
At the very beginning of the current year, AtoZ Markets reported that Ukrainian authorities planned to create a new working group on cryptocurrency legislation. That time, the news was announced by Ukrainian government.
During the official meeting regarding cybersecurity and infrastructure, Oleksandr Turchynov, the National Security and Defense Council Chief shared his outlook on the matter. He stated that a lack of regulation in regards to the tech poses a threat to Ukraine’s security and economy.
Following the acknowledgment of these risks, the formation of the new working group has begun.
Ukraine Crypto Working Group
The new Ukraine crypto working group includes officials from the National Bank of Ukraine, the Ministry of Finance, the National Securities and Stock Market Commission and the National Police, among others.
The key purpose of this working group is to determine which agencies have the authority to oversee the domestic digital currency market. The group also intends to create a system for collecting income taxes that are related to the cryptocurrency trading.
This May, the Head of Ukraine’s National Securities and Stock Market Commission (SSMCS) Timur Khromaev stated that the commission plans to consider recognizing cryptocurrencies as a financial instrument. He also highlighted the need for the legal recognition of cryptocurrencies. The Financial Stability Council supported this idea later in their July statement.