November 27, 2022

Ukraine will make 5% preferential cryptocurrency tax for 5 years

Ukraine will make 5% preferential cryptocurrency tax for 5 years

A bill defining the procedure for taxing cryptocurrency income in Ukraine has been filed for consideration in the Verkhovna Rada, the country's legislature, reports CoinDesk.

The bill was prepared by the MinistryDigital Transformation of Ukraine, the Blockchain4Ukraine Inter-Factional Parliamentary Association and the Better Adjust Delivery Office (BRDO). The authors are 13 deputies of the Verkhovna Rada and the document is intended to amend the Tax Code of Ukraine.

However, the most important thing in the content of the bill is the introduction of basic concepts related to digital assets. The bill defines assets such as “A special type of valuable property in digital form created, recorded and implemented in electronic form”such as cryptocurrencies, tokens and other types not specified in the project.

“... the adoption of [the bill] will create conditions forlaunching the virtual assets market in accordance with the legislation of Ukraine, taking into account the balance of interests of entities engaged in operations with virtual assets, and the state that will receive additional tax income from such transactions ”, - noted in the Ministry of Digital Transformation.

Virtual Assets Trading Revenue Will Becalculated as the difference between the purchase price and the amount received upon sale. Profit is declared as a “different” type of income, while losses cannot be redirected to reduce the overall financial result before tax reduction.

Cryptocurrency income taxed onstandard rate, which is 18 percent. However, an initial grace period of five years is expected when the personal income rate is only 5%. When working with digital assets, no VAT is charged.

Experts believe that the main task isRemoving existing barriers to cryptocurrency business In particular, the National Bank of Ukraine should allow the opening of accounts for a cryptocurrency company.

Recall that the Ministry of Digital Transformation has entered into a partnership agreement with Binance, under which the exchange will assist in the development of legislation for the cryptocurrency industry.