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Ruslan Kyslyak
correspondent
Image: Freepik (AI generated)
There must be a legal crypto market in Ukraine! The market participants themselves, the state and our international partners are interested in this. The bill, designed to regulate the new digital reality, bring funds to the state budget, protect “professional” participants in the crypto market and secure individuals who own crypto assets, as well as bring Ukraine closer to the digital West, was ready for consideration in parliament back in April. But it was voted on in the first reading only on September 3.
Without going into details now about why the NSSMC leadership did not like the draft law, which seems to have been the reason for the almost six-month delay, there is reason to assume that the parliament's activation on this issue was the result of pressure from international partners.
Delo.ua delved into the essence of the draft law, and also asked experts about the prospects for the crypto-asset market in Ukraine.
What will the crypto market look like in Ukraine?
What the crypto market in Ukraine should look like (in the minds of MPs) was described in detail and publicly by Danylo Hetmantsev, the head of the parliamentary committee on finance, tax and customs policy.
The bill, approved in the first reading, in particular provides for:
The definition of a virtual asset is a special type of digital object (property) that exists in electronic form thanks to distributed ledger technology (blockchain).
Important: virtual assets are not money and cannot be used as an official means of payment in Ukraine. Their legal regime is close to the regime of movable property from the point of view of civil law. At the same time, the draft law provides for the identification of electronic money tokens with electronic money within the meaning of the Law of Ukraine “On Payment Services”.
The project divides all virtual assets into three main categories:
- asset-backed tokens — their value is stabilized by being tied to assets, such as currency or property;
- electronic money tokens – tied to one official currency;
- other virtual assets — a category that includes assets that do not belong to the first two types.
According to the draft law, the market regulator will determine which virtual assets (except for asset-backed tokens and electronic money tokens) will belong to this category.
Ownership of virtual assets (VA) is acquired through issuance, transaction, law or court decision and is evidenced by possession of access means, such as cryptographic keys. The law provides for a presumption of legal ownership unless a court establishes otherwise.
A public offering of a VA involves the preparation of a so-called “white book” – a document with detailed information about the asset, the issuer and risks. Admission to trading on trading platforms is also regulated by clear procedures, including authorization and disclosure of information.
The White Paper is a mandatory document for a public offering and must be truthful, clear and not misleading. Marketing communications must be consistent with this information, contain risk warnings and not be disseminated until the White Paper is published.
Providers of services related to the turnover of VA (storage, trading, transfer, etc.) must be authorized, meet organizational and financial requirements, and ensure client protection.
Protection of asset owners and clients occurs through transparency, disclosure, and measures against insider trading, market manipulation, and unlawful disclosure of information.
The issue of taxation is determined separately.
Danylo Hetmantsev recalls that it was precisely because of tax issues that the previous law on virtual assets never came into effect.
The draft law provides for:
regarding personal income tax:
— maintaining separate (from other income and other investment income) taxation of income from transactions with virtual assets;
— taxation of profits from transactions with virtual assets received during the year as the difference between sales revenues and expenses for the acquisition of VA during the year;
— an individual must declare income and pay taxes themselves;
The following are not taxed : a) income from transactions on the exchange of VA for other VA, as well as income from the sale of VA within the limits of one minimum wage; b) the value of VA received as a result of their emission (creation) or free transfer from their issuers or offerors and/or received exclusively in exchange for personal data of an individual;
— losses incurred in previous periods (if sold for less than purchased) are taken into account until they are repaid (with some exceptions);
— for virtual assets purchased before the entry into force of this law, if they are sold during 2026, individuals will have the right to choose a preferential personal income tax rate of 5%.
regarding corporate income tax:
— new differences are introduced to adjust the financial result (similar to how securities transactions are taxed);
— the list of costs taken into account when carrying out transactions with virtual assets is determined by the Ministry of Finance upon submission by the regulator.
regarding value added tax:
are not subject to VAT:
— operations on the issue (issuance), placement in any form of management, sale, exchange, redemption of virtual assets, except for: a) sale and exchange of NFTs; b) sale and exchange of virtual assets that certify the right to demand the transfer of property or the provision of a service;
— services of service providers related to the turnover of virtual assets (except for consulting services, which are taxed on a general basis).
regarding the simplified taxation system:
— Single tax payers are prohibited from transactions with virtual assets;
— providers of services related to the turnover of virtual assets do not have the right to use the simplified taxation system.
in terms of administration:
— service providers related to the turnover of virtual assets that provide services to residents of Ukraine are required to register with regulatory authorities and submit an annual report on transactions with such assets with individuals and legal entities that are residents of Ukraine (this is a step towards the gradual introduction of CARF and the implementation of the DAC8 directive);
— for failure to fulfill these obligations, fines are provided for service providers related to the turnover of virtual assets, which will be applied in reduced amounts during the transition period (in 2026 – 10% of the established fine, during 2027-2029 – 25% of the established fine).
It is expected that the above-mentioned amendments to the Tax Code will come into effect on January 1, 2026.
“This is a question of establishing clear rules of the game for market participants. Legalization of crypto can potentially have a significant effect on the budget. According to the Global Ledger study on the potential for taxation, if the crypto market had been legalized earlier, in 2021-2024 the state could have received about UAH 8.34 billion in taxes from crypto exchanges registered in Ukraine (at a rate of 18%) and up to UAH 6.53 billion from personal income taxation,” Danylo Getmantsev cites the figures.
What awaits professional market participants and crypto asset owners?
Provider authorization
To date, there are no professional participants in the cryptocurrency market in Ukraine, as there is no regulatory framework for them.
“There are exchangers, traders, but they are outside the legal field and are in no way regulated or controlled by the state. Today, there are no special taxation rules for either individuals or legal entities from the point of view of working with virtual assets,” says Oleksandra Nikitina , a lawyer, expert in international taxation and cryptocurrency regulation, and partner at Ecovis Bondar & Bondar Law Bureau, in a comment for Delo.ua.
The draft law provides for mandatory authorization of virtual asset service providers for 9 types of activities. Authorization is, in fact, an analogue of a license, a permitting procedure that every market participant who wants to become a professional participant must go through.
“If you want to buy a car, you can't do it directly by paying with crypto. You have to do it through processing platforms that have received authorization. As long as there are no such authorized providers, you basically have no right to pay with crypto for any real-world services and goods,” the publication's interlocutor explains.
The document also provides for mandatory authorization of token issuers , and , accordingly, a ban on the circulation of tokens issued by unauthorized issuers.
Mandatory reporting is provided for all professional market participants who are authorized. They are required to register with the State Tax Service and annually report on the operations of individuals and legal entities and their income and expenses by January 31 of each year following the reporting year .
“From the windows” “introduces a procedure by which the Tax Service will receive information about transactions of individuals and legal entities with virtual assets . This is necessary so that the Tax Service can control the proper declaration of income. This is something that does not exist in the banking sector today , ” says Nikitina. According to her, the law actually “cancels” the myth of the anonymity of crypto .
A simplified authorization procedure for foreign providers is being introduced. If a foreign provider wants to work with a resident of Ukraine, it is required to authorize itself with the Ukrainian regulator. The consequences of non-authorization will be that the Tax Service will not allow taking into account the costs of transactions with virtual assets for unauthorized providers . Accordingly, this will have tax consequences for users.
“ If you deal with an unauthorized provider, you will not be allowed to take into account the costs of purchasing a particular virtual asset. “What will this lead to? The income received from the sale will not be reduced by the costs associated with the acquisition of such an asset , ” the expert explains .
Taxation features
The law provides for the taxation of transactions with crypto assets according to the same principles that apply today to investment assets – stocks, bonds, other securities, derivatives, etc.
Important: It is the individual's profit from the sale of a crypto asset for fiat money that is taxed.
Taxation of legal entities occurs not only in the case of the sale of virtual assets, but also in the case of their exchange. The tax rate is standard – 18% + 5%.
“Individual entrepreneurs are prohibited from dealing with crypto at all. Simplified legal entities are also prohibited from dealing with crypto in Diya.City residents. Diya.City residents who have chosen the tax regime on withdrawn capital, if they carry out operations with virtual assets, are obliged to switch to the general taxation system , ” explains Oleksandra Nikitina.
Important: During the first year from the start of the law (it is assumed that this will be 2026), individuals will have the right to declare income from the sale of virtual assets and pay income tax excluding expenses for the acquisition of virtual assets at a rate of 5% personal income tax + 5% military levy.
Virtual assets of individuals , received free of charge ( including as a result of mining, staking, as a gift ) , are not taxed at the stage of receipt . However , when selling such assets, the entire amount of income will be taxed, without deducting expenses.
Legal entities at sale of virtual assets, alienation of them to related parties or transfer in any other way than sale for money – when calculating taxes , they lose the right to take into account the costs of acquiring these assets .
Accounting for transactions with virtual assets for both individuals and legal entities is kept separately from all other transactions, again — by analogy with investment assets.
Tax returns are filed independently. Service providers and issuers of virtual assets are not tax agents. An individual must independently calculate, declare and pay tax based on the results of the year.
Protection of crypto asset owners
Currently, in Ukraine, no one can guarantee the protection of the owners of virtual assets. This is, of course, due to the lack of any legislative regulation of this market. According to Oleksandra Nikitina, the authorization of professional market participants is intended to solve this problem.
“Currently, crypto assets are purchased for cash or through P2P transactions, where the purpose of payment does not mention crypto. Accordingly, it is impossible to prove that you bought a crypto asset and that it belongs to you. That is, the issue here is not that there are no control tools. The issue here is that the owners purchase crypto illegally and, accordingly, then have no way to protect themselves,” the lawyer explains.
Authorized providers will be responsible for the proper storage of virtual assets. The authorization process itself will include a procedure for verifying that the provider has all the appropriate technical infrastructure to ensure the protection of user rights.
“And this is precisely what the authorization procedure is for. There are a bunch of technical requirements that are set for providers to ensure that assets are protected . If the user interacts with an unauthorized provider at his own peril and risk, then it is his own risk , ” explains Nikitina .
Market participants also say that legislative regulation of the virtual asset market will protect the rights of crypto owners and reduce the risks of fraud and illegal transactions.
“We have long and openly advocated for the development of clear and understandable rules for the crypto industry and are working with legislators to create conditions that can provide a clear and acceptable framework for cryptocurrency transactions and reduce risks for investors and users , ” he said in a comment to Delo.ua. Regional Head of Binance Central and Eastern Europe, Central Asia and Africa Kirill Khomyakov.
According to him, regulation not only creates a balance between industry participants, but also actively contributes to the sustainable development of the crypto industry, and also provides the opportunity to offer more services to users – such as bank fiat channels, crypto cards, etc. And, of course, market regulation will result in an increase in the level of trust in crypto assets among the population.
