Ukraine Proposes 23% Tax on Crypto Gains
The Securities and Exchange Commission in Ukraine has put forward a proposal to impose a 23% tax on individual income derived from cryptocurrency transactions. This tax would consist of an 18% personal income tax and an additional 5% military levy.
This proposal is part of a larger effort to develop a comprehensive tax system for digital assets in Ukraine. The agency highlighted the complexity of taxing personal income from crypto operations, citing the decentralized and anonymous nature of these transactions as a significant challenge.
One of the key issues identified by the commission is the difficulty in tracking crypto transactions, as many of these operations are conducted through decentralized platforms or self-hosted wallets. Unlike traditional income sources, where tax obligations are fulfilled by intermediaries such as employers or banks, individuals are solely responsible for reporting income from virtual assets.
“Unlike traditional income (salary, dividends), where the tax obligation is fulfilled by a tax agent (for example, an employer or a bank), in the case of virtual assets this function is most often performed by the individual.”
Ukraine’s Securities and Exchange Commission
Additionally, taxpayers may struggle to provide evidence of their token acquisition expenses, especially in cases where tokens are obtained through peer-to-peer exchanges, airdrops, or mining. The volatility of crypto prices further complicates tax obligations, as individuals may be required to pay taxes on unrealized gains due to market fluctuations.
The commission also highlighted the lack of awareness among users regarding their tax obligations related to crypto transactions. In response, the agency has called for simplified reporting mechanisms, taxation upon converting crypto to fiat currency, and the development of digital tools to assist individuals in meeting their tax requirements.