Ukraine Drafts Law to Exempt Crypto Income and Profits from Taxation

A bill has been submitted to the Ukrainian parliament to amend the country’s tax code to exempt cryptocurrency income and profits from taxation, including from buying, selling, transacting, and mining.

Also read: Ukraine’s New Bill Treats Bitcoin as Financial Asset and Encourages Mining

Bill Seeks Crypto Tax Exemptions

The head of the Committee on Tax and Customs Policy of the parliament of Ukraine, Nina Yuzhanina, submitted a bill to the parliament to amend the country’s tax codes with regards to cryptocurrencies and their derivatives. This bill is referred to as Bill No. 7246 and was submitted on October 30.

The bill seeks to amend the tax code of Ukraine to exempt the profits from the purchase and sale of cryptocurrencies and their derivatives as well as revenues from cryptocurrency operations and from mining. According to the note accompanying the bill submitted to the parliament:

In order to create an effective mechanism for stimulating the market of cryptocurrency in Ukraine, the logical step is the exemption from taxation of profits of enterprises…Income from cryptocurrency operations should not be included in the calculation of the total monthly (annually) taxable income, and transactions with cryptocurrency and mining crypto goods are classified as transactions that are not subject to taxation.

This new bill is the third submitted to the parliament for the legal framework of cryptocurrencies. The first was submitted in the first week of October. It proposes considering cryptocurrency a property that can be exchanged for other goods and services.

The second bill was submitted one week after the first bill. Entitled “On the stimulation of the market of cryptocurrencies and their derivatives in Ukraine,” the bill proposes treating cryptocurrencies as financial assets. This third bill is meant to be a follow up to the second bill and provides provisions for crypto derivatives as well as cryptocurrencies themselves.

High Council Meeting

The High Council of Experts of the National Bank of Ukraine (NBU) held a meeting on October 26 to discuss cryptocurrency regulations. The NBU subsequently issued a press release stating that:

During the event, the recommendations of the High Council of Experts on the urgent need for determining the legal status of cryptocurrency in Ukraine were approved.

The meeting was attended by members of the NBU board of directors, representatives of related government departments, financial market regulators, committees of the Verkhovna Rada of Ukraine, people’s deputies of Ukraine, heads of banking associations, as well as representatives of scientific and expert circles.

Bohdan Danylyshyn, Chairman of the NBU Council, said at the beginning of the meeting that the members of the High Council of Experts could not stand by and do nothing. He noted that “the growing popularity of cryptocurrency in the world as well as in Ukraine requires an appropriate response from financial market regulators,” adding that:

I am convinced that any attempt to restrict the functioning of such a market may have the opposite effect, namely, to facilitate the shadowing and delegitimization of processes associated with it.

“In my opinion, creating the necessary legal framework will be the first step towards building a transparent and clear market for cryptocurrencies,” he elaborated. “In turn, it will promote the advancement of innovative technologies and the digital economy as a field of knowledge in Ukraine.”

Do you think Ukraine will go through with the proposed tax exemptions for cryptocurrencies? Let us know in the comments section below.

Images courtesy of Shutterstock and the National Bank of Ukraine.

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