Not all cryptocurrency owners have to pay taxes
In Ukraine, there are still no separate laws regarding cryptocurrency taxation – and many digital asset owners are unsure whether they need to declare anything or pay taxes.
How to properly declare cryptocurrency was explained in a comment for RBC-Ukraine by lawyer Olga Brus from the law firm “EvrikaLaw.”
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Main points
- Lack of special regime: there are currently no separate preferential rules or special rates for transactions involving virtual assets in Ukraine.
- General rate: all profits from the sale of assets are taxed at the standard rate for individual income.
- Declaration deadlines: annual tax reports on received income must be submitted by May 1 of the year following the reporting year.
- When to pay: the obligation to pay arises only at the moment of actual income receipt.
As the lawyer explains, the law “On Virtual Assets” has been adopted in Ukraine – but it is not yet fully operational. The reason is simple: it will come into effect only after amendments to the Tax Code, which are not yet in place.
“Therefore, today cryptocurrency is not mentioned as a separate object of taxation in the Tax Code. Instead, general rules apply,” says the lawyer.
When does the obligation to pay tax arise?
The main thing to understand is: simply holding cryptocurrency does not mean you have to pay tax on it.
The tax obligation arises only when you receive income – that is:
- you sold cryptocurrency for money;
- you exchanged it for other assets;
- you converted it to cash or to a card.
As Olga Brus explains, such income falls into the category of “other income” for individuals according to Article 164 of the Tax Code.
Photo: the main thing to know about declaring cryptocurrency (infographic RBC-Ukraine)
How much needs to be paid?
The rates are standard – as for most individual income:
- 18% – personal income tax (PIT);
- 5% – military tax.
In total – 23% of the received income.
When and how to declare?
According to Olga Brus, if you received income from cryptocurrency transactions and no tax was automatically withheld from it – you are required to submit an annual declaration yourself.
The deadlines are as follows:
- by May 1 – submit the declaration of property status and income for the previous year;
- by August 1 – pay the calculated tax amount.
Q&A (FAQ)
– Do I need to pay tax if I simply hold cryptocurrency in my wallet?
No, the obligation to pay taxes arises only when you receive actual income. This occurs when selling assets for regular money or exchanging them for goods.
– What is the overall tax rate on profits from cryptocurrency in Ukraine?
The owner must pay 18% personal income tax and 5% military tax. Overall, the state requires 23% of the net profit received.
– By what date must I submit a declaration of income from virtual assets?
The report for the previous year must be submitted by May 1. The calculated tax amount must be paid by August 1.
Also read:
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