Legalization of Cryptocurrency

In March 2022, Ukraine took a major step towards legalizing cryptocurrency when President Volodymyr Zelensky signed the Law on Virtual Assets. This law defines the legal status, classification, and ownership of virtual assets, and sets the conditions for their regulation and taxation. The National Securities and Stock Market Commission and the National Bank of Ukraine will regulate the crypto asset market.

Taxation of Cryptocurrency

In early November 2023, a draft law on the specifics of cryptocurrency taxation, which had been in development for over a year, was registered. This draft law introduces taxation for cryptocurrency transactions and adapts Ukrainian legislation to European regulatory standards.

Basic Tax Provisions:

For individuals:

Transactions with digital assets are subject to a 5% personal income tax and a 1.5% military tax.

The grace period for individuals is 5 years.

For entrepreneurs:

Mandatory licensing for conducting legal crypto-activity.

The size of the authorized capital varies from 19 thousand to 38 thousand euros for Ukrainians and from 96 thousand to 193 thousand euros for foreign entrepreneurs.

The cost of a license ranges from 68 thousand to 136 thousand UAH for Ukrainians and from 340 thousand to 680 thousand UAH for foreign enterprises.

After the grace period:

Taxation increases to 18% on investment profits and 1.5% military tax.

Interesting Facts 🌟

Ukraine in the top: Ukraine is among the top 10 countries in terms of cryptocurrency usage, which indicates a high level of interest and involvement of the population in the crypto industry.

Helping the Army: During the conflict with Russia, cryptocurrencies were used to raise funds to support the Ukrainian army, demonstrating their importance and flexibility in crisis situations.

Conclusion

Legalization and taxation of cryptocurrency in Ukraine opens up new opportunities for businesses and investors, and also contributes to the development of the country's digital economy. With the introduction of new laws, Ukraine seeks to create transparent and safe conditions for all participants in the crypto market.