Ukrainian regulators are gearing up to impose an 18% tax on cryptocurrency gains starting from 2024, with lawmakers expected to vote on the proposals this fall. The National Commission for Securities and the Stock Market plans to introduce a draft law in the next parliamentary session. The regulator’s proposals include a flat-rate 18% tax on income from crypto investments, while military service members will only be subject to a 1.5% tax. Commission member Yuriy Boyko stated, “We hope that the law will be adopted in September, and will come into force in 2024.”
As part of the proposed changes, the commission also seeks to grant itself and the central bank regulatory powers over the cryptocurrency sector. If the draft law is enacted, all Ukrainian crypto exchanges and brokerages will be required to apply for commission-issued operating permits. This move aligns with Kyiv’s recent efforts to modify its crypto regulations in accordance with the EU, as they seek to introduce legislation similar to the EU’s Markets in Crypto-Assets (MiCA) framework. According to Boyko, the draft law allows for operation under EU rules, requiring compliance from exchanges and crypto traders who want to enter the market.
However, the news of an 18% tax on crypto gains has garnered mixed reactions from the nation’s crypto community. Mykhailo Chobanyan, founder of the Kuna crypto exchange, cautioned the authorities against rushing into action. He emphasized the need to ascertain the necessity, methodology and timing of regulation before introducing new legislation. Meanwhile, a legal expert cited by Forklog warned that the proposed 18% tax rate could discourage investors, potentially resulting in an exodus of users and crypto companies from Ukraine.
The central bank has called for regulations that strike a balance between protecting consumer interests and maintaining financial stability, taking into account the specific characteristics of Ukraine’s legal and financial system. In addition to regulatory changes, Kyiv has expressed its intent to combat a perceived increase in crypto-powered corruption. While the proposed 18% tax on crypto gains might seem unappealing to some, it is important to consider the broader context of regulatory developments and their potential impact on Ukraine’s cryptocurrency ecosystem.
Source: Cryptonews
