Ukraine is gearing up to implement a new tax regime for cryptocurrency profits, with regulators proposing an 18% tax rate on crypto gains from 2024. The National Commission for Securities and the Stock Market intends to present a draft law to lawmakers in the upcoming parliamentary session, as reported by Forbes Ukraine. Alongside taxation, the proposals also aim to grant regulatory powers to the commission and the central bank, while requiring crypto exchanges and brokerages to obtain operating permits. However, the news has garnered mixed reactions within the country’s crypto community.
New Taxation Framework and Regulatory Powers:
The National Commission for Securities and the Stock Market plans to introduce a flat-rate 18% tax on income derived from crypto investments. Notably, military service personnel will only be subject to a 1.5% tax rate. The commission member, Yuriy Boyko, expressed hope for the law’s adoption in September, with enforcement set for 2024. Additionally, the commission seeks to empower itself and the central bank with regulatory authority over the crypto sector. This move aligns with Ukraine’s recent efforts to align its crypto regulations with the European Union’s Markets in Crypto-Assets (MiCA) legislation.
Reactions from the Crypto Community:
The news of the proposed tax rate sparked varied responses from the Ukrainian crypto community. Mykhailo Chobanyan, the founder of the Kuna crypto exchange, cautioned against hasty decision-making, stressing the importance of understanding the reasons, methods, and timing for implementing regulations before enacting them into law. Forklog, a media outlet, quoted a legal expert who voiced concerns about the 18% tax rate potentially deterring investors and causing a potential exodus of users and crypto companies from Ukraine.
Balancing Interests and Fighting Corruption:
Ukraine’s central bank emphasized the need for regulations that strike a balance between consumer protection and financial stability. They urged for consideration of the country’s legal and financial system’s intricacies in formulating the regulations. Moreover, Kyiv has expressed its commitment to combatting perceived crypto-powered corruption, taking steps to address the issue.
Ukraine is on the verge of implementing significant changes to its crypto landscape, with plans to introduce an 18% tax rate on cryptocurrency gains starting in 2024. The proposals put forth by the National Commission for Securities and the Stock Market aim to not only levy taxes but also grant regulatory powers to the commission and the central bank. While these developments align Ukraine’s regulations with EU standards, the reactions from the local crypto community remain mixed. It is crucial for the authorities to consider the potential impact on investors and companies before finalizing the new tax policy. As Ukraine moves forward with these changes, it seeks to strike a delicate balance between protecting consumer interests and maintaining financial stability, all while combatting crypto-related corruption.
