Ukraine’s National Securities and Stock Market Commission (NSSMC) has unveiled a proposed taxation framework that would impose up to a 23% tax on certain cryptocurrency transactions. This includes an 18% personal income tax supplemented by a 5% military levy, applicable when cryptocurrencies are converted into fiat currency or used for purchasing goods and services.
Notably, the proposal exempts crypto-to-crypto transactions from taxation, aligning Ukraine’s approach with countries like Austria, France, and Singapore. Additionally, stablecoins backed by foreign currencies may be exempt or subject to reduced tax rates of 5% or 9%, recognizing their lower speculative nature and similarity to foreign exchange transactions.
The NSSMC’s framework also addresses other crypto-related activities:
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Mining: Considered a business activity, with potential tax-free thresholds for small-scale operations.
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Staking: May be taxed as business income or only upon conversion to fiat currency.
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Airdrops and Hard Forks: Could be taxed upon receipt or when the tokens are sold, depending on their classification.
The commission suggests implementing tax-free thresholds to alleviate the burden on small investors, a practice common in other jurisdictions. Exemptions for donations, transfers between family members, and long-term holders are also under consideration, though non-custodial wallets might not qualify for these benefits.
This initiative is part of Ukraine’s broader effort to harmonize its regulations with the European Union’s Markets in Crypto-Assets (MiCA) framework, supporting its EU integration goals. The proposed tax framework is currently under consideration and has not yet been enacted into law.
