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Ukraine Plans to Tax Crypto by 18%—Here’s How It Will Affect You
In a move that is likely to have far-reaching implications for the crypto community, Ukraine has announced plans to introduce an 18% tax on all cryptocurrency earnings. This comes as part of broader efforts to regulate the burgeoning industry in the country.
Under the proposed plan, investors could face an 18% personal income tax, plus an additional 5% military levy. However, it’s not all bad news – there are certain exemptions and exceptions that may apply.
Mining, staking, and airdrops will be subject to this new tax, but crypto-to-crypto trades will remain tax-free. This is a relief for traders who frequently swap digital assets, as it aligns with the approach taken by other crypto-friendly nations such as Austria, France, and Singapore.
What’s more, investors won’t have to worry about being taxed on simply holding onto their virtual assets. Taxes will only apply when these assets are converted into fiat currency or real-world assets. This means that those who choose to hold their cryptocurrency long-term will not be subject to the new tax.
However, it’s worth noting that not all transactions will be exempt from taxes. Certain activities, such as paying for goods and services with crypto, rewards for staking or transferring digital assets, and token modifications resulting in new crypto creation, will be subject to Value-Added Tax (VAT).
While some transactions may qualify for VAT exemptions under the EU VAT Directive, it’s not entirely clear which activities will fall under this umbrella.
The proposed bill is currently undergoing review by Ukraine’s finance and tax authorities, with a final decision expected soon. In tandem with this, the National Bank of Ukraine is working on a broader crypto regulatory framework that is set to be launched by October 2025, based on the European MiCA directive.
If this proposal is approved, it could have significant implications for the Ukrainian crypto market and the broader industry as a whole.
Source: https://coinpedia.org/news/ukraine-plans-to-tax-crypto-by-18-heres-how-it-will-affect-you/
