Ukraine unveils virtual asset taxation plan... Up to 23% tax on cash conversion

The Ukrainian financial authorities have announced a new taxation plan that includes the taxation of virtual assets (cryptocurrencies).

According to Cointelegraph on the 9th (local time), the National Securities and Stock Market Commission of Ukraine (NSSMC) disclosed the draft in an official statement released on the 8th, stating, "The taxation of virtual assets is no longer a hypothesis but is becoming a reality." According to the proposed plan, when virtual assets are converted into cash or exchanged for goods and services, an 18% income tax and a 5% military tax (special tax for military purposes) will be imposed. The total tax rate can reach up to 23%.

However, exchanges between virtual assets are excluded from taxation. Regarding this, the NSSMC explained, "We have aligned with the legislative standards of crypto-friendly countries such as Austria, France, and Singapore."

Different taxation standards are applied to stablecoins. The NSSMC stated, "Since stablecoins are linked to foreign exchange values, they are considered akin to foreign exchange transactions," and added, "It is reasonable to exclude them from taxation or apply a low tax rate of 5-9%."

Ruslan Magomedov, a commissioner of the NSSMC, said, "This is a matter that can significantly impact the characteristics of the market and tax responsibilities," and added, "We have prepared a framework to allow the legislature to make informed decisions by clearly analyzing the pros and cons of each option."