Ukraine proposes a 23% tax on income from cryptocurrency when converting to fiat, but exempts crypto-to-crypto and stablecoin transactions, according to the new legal framework of NSSMC.
The National Securities and Stock Market Commission of Ukraine (NSSMC) has recently announced an important tax proposal to regulate digital asset trading. Accordingly, profits from converting cryptocurrency to fiat currency or using it for goods and services will be subject to a 18% personal income tax, plus an additional 5% military fee, raising the total tax rate to 23%.
In contrast, internal transactions within the cryptocurrency ecosystem - such as exchanging between cryptocurrencies or using stablecoins - will not be taxed.
This proposal reflects an effort to balance the need to expand budget revenue with the goal of facilitating development in the digital asset industry. NSSMC Chairman Ruslan Magomedov stated that cryptocurrency taxation in Ukraine is no longer a hypothetical concept but an imminent reality.
In a statement on April 8, he affirmed that the primary goal of the new legal framework is to provide a comprehensive and multifaceted information platform, enabling Parliament to make evidence-based decisions rather than relying on intuition or vague concerns. He also emphasized that each tax policy choice has the potential to shape market behavior and financial obligations for both individuals and businesses.
Not only focusing on pure transactions, the proposal also expands its scope to other income-generating activities in the digital asset sector. For activities like mining or Staking, NSSMC suggests they should be treated according to the tax logic of ordinary business activities, while leaving open the possibility of designing a more flexible taxation mechanism depending on the nature and timing of income recognition.
Similarly, events like Hard Fork and Airdrop are also mentioned as cases that require careful consideration of taxation timing: whether at the moment of occurrence or only when the asset is converted to fiat currency.
Another notable point is the pragmatic approach towards small-scale users. NSSMC clearly shows its intention to minimize administrative burden by proposing tax exemption thresholds for small-scale transactions or non-profit purposes. However, the effectiveness of these exemptions may be limited if assets are stored in non-custodial wallets - where monitoring and verifying cash flows becomes more complex under current enforcement conditions.
Strategically, this tax framework is a further step in building a legal system for a regulated digital asset market in Ukraine. After President Volodymyr Zelenskyy signed the foundational law in March 2022, relevant authorities have been promoting the completion of recommendation frameworks so that Parliament can enact a comprehensive tax law.
According to information from the Chairman of the Parliamentary Tax Committee, Daniil Getmantsev, the draft cryptocurrency tax law is in its final stage, and the NSSMC's proposed framework will play a crucial role in the structure of this legislation.
