Cryptocurrencies in Ukraine are recognized in accordance with the Financial Action Task Force (FATF), meaning it is now seen as a virtual unit that holds a value, allowing it to be traded and transferred electronically, as well as having the ability to be used as a payment or investment
As a result, Ukraine’s revenue agency will now require taxpayers to report their digital assets holdings as intangible property. Similarly to intellectual property or licenses for natural resources extraction.
To properly report cryptocurrency holdings, taxpayers will need to name the assets, the date of the acquisition, the total amount owned on the last day of the tax period and the value of the asset in Hryvnia, Ukraine’s national currency, based on the last day of the tax period.
While Ukraine’s Ministry of Digital Transformation made an announcement in February, stating that it would not be regulating cryptocurrency mining, as it is already governed by the rules of the blockchain protocol, they certainly aren’t planning to leave cryptos outright unmonitored.
The tax report requirements put out by Ukraine’s regulators can be seen as a means to formulate and define boundaries around cryptocurrencies. Furthermore, they’ve indicated in the past that crypto service providers will be obligated to monitor transactions above $1,200 and report any suspicious activities that take place.
Moreover, a new bill is currently pending the approval of Ukraine’s parliament which will have crypto-related earnings get taxed by 5% for the first five years of passage.
As it currently stands, Ukraine has still yet to develop a proper and comprehensive set of regulations in regard to the cryptocurrency industry. However, the new tax reporting rule can be seen as the first action Ukraine has taken towards it.
Stricter regulations towards crypto in Ukraine are certainly welcome as well, especially considering the scam scheme that had been operating from the country, targeting vulnerable and unaware investors from other countries who were interested in cryptocurrencies, with the likelihood of being discovered and shutdown being low had it not been for a whistleblower.