Ukraine lawmakers Propose Tax Breaks On Cryptocurrencies investments

Ukraine is inching closer to creating a conducive and regulated environment for cryptocurrency investments. A legislator has tabled a draft bill that if approved would create tax breaks for entrepreneurs and companies engaging in cryptocurrencies.

The Movement of New Forces party filed the new proposal as a way of relieving cryptocurrency businesses of taxation. The bill has already advanced through several important parliamentary committees as it continues to enjoy strong support.

Adoption of the new bill would mark an important milestone in Ukraine’s cryptocurrency’s landscape. For starters, it will result in amendments to the country’s tax code. Some of the breaks proposed include taxation of income earned from all cryptocurrency transactions.

The tax breaks would not only benefit businesses and individuals but as well as corporate entities dealing in crypto assets. The bill also proposes tax breaks on all crypto mining equipment. The break should thus go a long way in lowering the cost of buying mining equipment which should reduce the barrier of entry.

Bill 9083-1 also calls for the introduction of new terms for describing virtual asset as well as blockchain technologies. Currently, cryptocurrencies operate as intangible digital assets. The draft law on its part describes cryptocurrency mining as data processing.

Yuri Derevyanko who is one of the backers of the draft law expects a 0% tax rate to accelerate development of the cryptocurrency market. Lower tax regime should also go a long way in stimulating new investments in the burgeoning sector. The lawmaker also expects the law to make cryptocurrency a critical element of the country’s economy.

“I think that it is necessary to introduce a 10-year tax moratorium in the crypto space. We must streamline and legalize this huge sector, which will be the engine of the new economy,” said Mr. Derevyanko.

Ukraine is not new to such legislations as lawmakers work round the clock to create a conducive environment for cryptocurrency businesses. In September, another lawmaker did introduce a draft law that also calls for tax breaks on crypto investments.

While the latest bill calls for a 0% tax on cryptocurrency’s transactions the Solidarity Party bill calls for a 5% tax charge. The tax rate if approved would run until the end of 2023. Starting 2024 businesses and individuals would have to contend with an 18% tax rate under the bill.