Ukraine is among the most crypto supportive countries of the world after donations in cryptocurrency proved to be very helpful after its invasion. It introduced a “Draft Law” which lays out the basic rules pertaining to identification and crypto taxation in Ukraine. The country, as claimed by its Digital Minister, aims to be the best nation in terms of crypto jurisdiction and regulations. The pro-crypto nature is also evident by high ownership rates with around 15%, that is roughly 4.6 million, of the Ukrainian population owns cryptocurrency.
Do you have to pay crypto tax in Ukraine?
Yes, under the law on virtual assets income generated from crypto assets is taxable. Therefore, holding crypto currency is not taxable but if profit is generated on selling crypto, it is taxable.
When do you have to pay tax on crypto in Ukraine?
Whenever income will be generated by sale of crypto, taxes will be levied on that income. The tax rates are levied under the category of “ordinary income” under personal income tax.
What crypto transactions are taxable in Ukraine?
Sale of cryptocurrency and encashment of cryptocurrency into Ukrainian hryvnias are taxable in Ukraine.
What are the Crypto Tax Rates in Ukraine?
For individuals, income from the sale of cryptocurrency is taxed at 5%. For businesses, a corporate income tax of 18% is levied on crypto gains.
Ukraine Income Tax Brackets (2023)
A tax rate of 18% is levied on all sorts of income, salary in cash or kind, foreign income, income from other sources, dividends and other passive income.
Ukraine Capital Gain Tax Rates (2023)
|CAPITAL GAINS||TAX RATE (%)|
|FROM ALIENATION OF SHARES`||15|
|FROM BONDS/TREASURY BILLS||18|
How is Tax Calculated on Cryptocurrency in Ukraine?
Tax is levied on the gains from crypt transactions. Therefore, a positive profit received from sale of crypto or converting crypto into cash are taxable. In order to calculate the profit from sale of crypto there are two standard methods used majorly: First In First Out (FIFO) and Average Costs Based (ACB.
According to FIFO Method, you sell your oldest acquired coin first and cost is calculated according to the respective prices at which the coin was bought. Whereas, in ACB, time of buying doesnt matter and average cost is taken into account.
Let’s take an example,
Say you bought 2 BTC for 20,000 hryvnias in 2020 and 4 BTC for 60,000 hryvnias in 2021. Then you sold 4 BTC in 2022 for 1,00,000 hryvnias:
- FIFO METHOD
You sell 2 BTC from 2020 and 2 BTC from 2021. So cost price is:
= 20,000 + (2/4)*60,000
= 50,000 hryvnias
Profit = 1,00,000 – 50,000
Here, taxes are levied on 50,000 hryvnias.
- ACB METHOD:
All coins are of the same denomination. Therefore, cost price for one coin:
= (20,000 + 60,000)/6
= 13,333 hryvnias
So, cost price of 4 coins:
= 53,333 hryvnias
Profit = 1,00,000 – 53,333
Here, taxes are levied on 46,666 hryvnias.
Is there any Crypto Tax Fee in Ukraine?
Swapping one crypto coin for another is not taxable in Ukraine as not progit is realised from that.
Crypto Tax in Ukraine – FAQs
Do you have to pay tax when you buy crypto in Ukraine?
No, there are no taxes on buying crypto in Ukraine as no income is being generated in it.
Do you have to pay tax when you sell crypto in the Ukraine?
Yes, selling crypto is subject to taxes and profit is being made while doing so.
Do you have to pay tax when transferring crypto in Ukraine?
No, transferring crypto is not liable to taxes in Ukraine.
Do you have to pay tax when spending crypto in Ukraine?
Currently, crypto is not recognised as a medium to use for payments for goods and services in Ukraine. Therefore, it is not clear whether taxes are levied on spending in crypto or not.
Is swapping crypto taxable?
No, swapping one crypto for another is not taxable in Ukraine.
How much tax on crypto gains in Ukraine?
For individuals, a tax rate of 5% and for businesses a tax rate of 18% is levied on crypto gains in Ukraine.
How do I avoid capital gains tax on crypto in Ukraine?
Taxes can be avoided by holding crypto longer or in order to increase value, swapping to a more profitable coin.