Ukraine's Crypto Tax Plan: Balancing Budget and Military Needs
1min read Ukraine is advancing its plans to legalize and tax cryptocurrencies, aiming to generate funds for its budget and military. Ukrainian lawmakers are drafting a crypto tax bill, with proposed tax rates ranging from 5% to 10% on transactions. However, for undocumented crypto holdings, the tax could reach as high as 23%.
The primary goal of the crypto tax bill is to support the state budget and strengthen military operations amid the ongoing conflict with Russia. Danylo Hetmantsev, head of the Verkhovna Rada’s Committee on Finance, Tax, and Customs Policy, has confirmed that the primary text of the bill has been finalized. However, discussions are ongoing about how authorities will monitor and regulate crypto transactions.
Hetmantsev expects the bill to pass its first reading by March 2025, but full implementation might take longer. Meanwhile, Taras Kozak, deputy of the Kyiv City Council, believes the process could extend into 2026. He noted that Ukrainians widely support a 5% crypto tax, which could be a fair rate. However, the government is also considering a more traditional tax structure, with an 18% income tax plus a 5% military tax, bringing the total to 23%.
One of the key provisions of the bill is a 23% tax rate on undocumented crypto assets. Investors who fail to provide proof of their initial investment sources may be required to pay this higher tax. As Ukraine pushes ahead with crypto legalization, the final decision on tax rates will play a crucial role in shaping the country’s digital asset growth.
