Ukraine Set to Tax Crypto at 5-10% as Legalization Nears

Ukraine is poised to introduce a 5% to 10% tax on cryptocurrencies as it moves closer to legalizing the digital asset market. Lawmakers are expected to vote on a long-awaited bill in the coming months, with the final decision on taxation still under discussion.

The country is exploring a crypto tax rate between 5% and 10% as part of its broader efforts to regulate the digital asset market while generating revenue for the state budget and military funding. However, officials are also considering applying the standard taxation framework, which would impose an 18% income tax plus a 5% military levy, bringing the total tax burden on crypto earnings to 23%.

The pending legislation aims to establish clear guidelines for the use and taxation of cryptocurrencies. While the exact tax structure has yet to be finalized, officials have hinted at a possible flat-rate tax or a tiered system based on trading volume.

Taras Kozak, a member of the Kyiv City Council and president of the investment group “UNIVER,” suggested that the process may take longer than initially expected. He is optimistic that the bill will pass by the end of the year, but full legalization and taxation will likely come into effect in 2026.

Ukraine has emerged as a leader in crypto adoption, with digital assets playing a vital role in financial transactions and donations since Russia’s invasion in 2022. The country has embraced blockchain technology to support its economy, but legal uncertainties have hindered mainstream integration.

Despite strong political support, the process has faced delays. In 2021, Ukraine passed a law recognizing cryptocurrencies, but it required additional amendments to align with EU standards. The current bill seeks to address those gaps, ensuring compliance with global anti-money laundering (AML) and counter-terrorism financing regulations.

Danil Hetmantsev, head of the Verkhovna Rada’s finance, tax, and customs committee, emphasized the urgency of passing the legislation, arguing that delays could hinder Ukraine’s ability to attract foreign investment in blockchain-based industries. If the law is enacted, Ukraine will join a growing list of countries formally integrating digital assets into their financial and tax systems.