Ukraine Reveals Crypto Taxation Plan: Proposes 18% Tax On Earnings

Ukraine’s National Securities and Stock Market Commission (NSSMC) unveiled its virtual asset taxation matrix to advance the government’s efforts to legalize cryptocurrencies in the coming months.

Ukrainian Regulator Develops Crypto Taxation Matrix

Ruslan Magomedov, Chairman of the NSSMC, revealed the long-awaited regulator’s proposal for crypto taxation, aiming to offer a practical tool for taxpayers, regulators, lawmakers, and experts that allows “structuring various scenarios of taxation of virtual assets.”

The NSSMC Chair noted that taxation is “not only a tool for filling the budget but also an important mechanism for regulating the market,” adding that an effective tax policy could prevent financial abuse, minimize money laundering risks, and create conditions for the legal and responsible use of digital assets.

Additionally, with the crypto industry’s global interest, adoption, and growth, Ukrainian lawmakers must “implement a clear, effective, and fair taxation system for virtual asset transactions.” According to the 32-page document, the main challenge for crypto taxation comes from the anonymous and decentralized nature of digital asset transactions.

“Unlike traditional income (salary, dividends), where tax obligations are fulfilled by a tax agent (for example, an employer or a bank), in the case of virtual assets, this function must most often be performed by the individual himself. This creates risks of improper declaration and administrative difficulties,” the taxation matrix reads.

The proposed tax structure introduces standard and preferential rates. The standard rate includes an 18% personal income tax on crypto earnings plus a 5% military levy, intended to support Ukraine’s defense. Meanwhile, the preferential tax outlines 5% and 9% rates for specific crypto categories.

Notably, crypto-to-fiat transactions are considered income and subject to tax, while crypto-to-crypto exchanges are exempt. Tokens received from staking, mining, hard forks, and airdrops “may be taxed as ordinary income or taxed only at the selling stage.” Similarly, gifted virtual assets, donations, and wallet transfers are exempt from taxation.

Ukraine’s Taxation Debate

Magomedov detailed that the taxation matrix was an NSSMC initiative that considered the experience of leading jurisdictions, such as Germany, Switzerland, Estonia, Singapore, and others, to measure “both the advantages and challenges in the taxation of virtual assets, adapting them to Ukrainian realities and legal field.”

It’s worth noting that Ukrainian President Volodymyr Zelenskyy signed the “On Virtual Assets” law in March 2022, setting a legal framework for regulating the digital asset market. By April 2025, the law has not been implemented, as it awaits amendments to the country’s Tax Code, which has resulted in the loss of millions in potential tax revenue.

In December, the Head of the Ukrainian Parliament Committee for Finances, Tax, and Customs Policy revealed lawmakers were working to legalize digital assets in the first half of 2025.

Nonetheless, the legislation has been delayed due to the taxation debate, with experts forecasting that the bill will be introduced in late 2025 and crypto likely legalized by 2026.