Ukraine releases new draft bill on crypto-taxation

Earlier this month, cryptocurrency exchange Binance had revealed that it would be assisting Ukraine in its development of cryptocurrency legislation. This effort seems to have borne fruit after the Ukranian Digital Transformation Ministry released a draft bill pertaining to the taxation of cryptocurrencies in the country. However, the involvement of Binance, if any, in the present development, remains uncertain.

The bill was reportedly put together by a parliamentary association, Blockchain4Ukraine, the Better Regulation Delivery Office [BRDO], and the country’s Digital Transformation Ministry. According to a local news outlet, thirteen members of the parliament co-authored the draft bill in order to amend Ukraine’s Tax Code.

According to the bill, cryptocurrencies are categorized under a “special type of valuable property in the digital form, created, accounted for and disposed of electronically.” The bill also stipulates that cryptocurrency income would be taxed at 18 percent, which is the standard rate for taxation in the country. However, a 5 percent initial rate on personal income for a five-year period on the sale of cryptocurrencies would also be instituted, if the parliament passes the bill.

Additionally, there would be no VAT on the sale of cryptocurrencies, the bill said.

“The first feature is a 5 percent tax rate on personal income for investment profit from the sale of crypto assets for a five-year period.”

The report also stated that the difference between the price of a digital asset during the time of purchase and the value acquired at the time of sale would be considered as the ‘income.’

The country seems to be taking a huge leap into the cryptocurrency industry with its latest move. However, it is important to note that the bill is yet to be passed by Ukraine’s parliament, the Verkhovna Rada.  The report added,

“We are confident that the adoption of this [draft] law will create conditions for the launch of the virtual assets market in line with the legislation of Ukraine, taking into account the balance of interests of entities engaged in transactions with virtual assets and the state, which will get additional tax revenue from such transactions.”