The Verkhovna Rada of Ukraine has approved a bill in its first reading to legalize and tax cryptocurrencies, introducing a total tax rate of 23%.
Taxation of Cryptocurrency
The bill passed with 246 votes in favor, introducing a total tax of 23% on cryptocurrency profits, an 18% income tax, and a 5% military levy, along with a preferential 5% tax on fiat conversion profits for the first year.
Uncertainties Surrounding the Bill
While the framework outlines basic rates, the bill leaves several questions unanswered, such as which agency will serve as the main regulator. 'I don’t see the point in writing about what’s there for a long time; there will be a lot of changes before the second reading,' stated lawmaker Yaroslav Zhelezniak, who announced the bill’s approval.
Economic Context and Strategies
The government is considering cryptocurrency as a means of reviving the economy. Legislative initiatives include a crypto asset reserve system and frameworks to encourage the repatriation of digital assets held abroad by Ukrainians. If the law is approved in its final form, it may enhance the nation's attractiveness to fintech companies and cryptocurrency investors.
The cryptocurrency legalization bill in Ukraine represents a strategic step towards economic recovery and adaptation to the growing digital asset market.
