Ukraine plans to impose 18% income tax on virtual assets

Odaily Planet Daily News Ukraine has made significant progress in regulating the taxation of cryptocurrencies. The National Securities and Stock Market Committee (NSSMC) has released a detailed framework for virtual asset taxation. The proposal not only proposes a standard tax model, but also includes a preferential tax model, showing that Ukraine is actively aligning its financial system with international digital asset standards. The proposal was announced on Telegram by the chairman of the committee, Ruslan Magomedov, on Tuesday, proposing an 18% personal income tax on virtual asset gains and an additional 5% military tax, which is a special wartime tax mainly used to support national defense. In addition, the proposal also sets preferential tax rates of 5% and 9% for specific categories. These recommendations refer to international experience and are adjusted in combination with the Ukrainian legal framework. Under the proposed rules, taxable income can be defined as gross income or net income after deducting expenses, which is usually recognized when payments are received or assets are exchanged for legal currency, non-virtual goods and services. Transactions involving only virtual assets do not trigger tax obligations under this framework. At the same time, the document also provides tax guidance for activities such as mining, staking, airdrops and hard forks, clarifying that activities such as free token supply, token creation and virtual asset storage are exempt from VAT, but rewards or services involving token modification or cryptocurrency payment of goods and services may be subject to tax. Some transactions may enjoy tax exemption under Article 135 of the EU VAT Directive, especially payment-related services, but the Commission also pointed out that such classification may require further interpretation and legal clarification. (Cryptonews)