18% income tax on income

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The National Securities and Stock Market Commission of Ukraine (NSSMC) has announced its virtual asset tax matrix to facilitate government efforts to legalize cryptocurrencies in the coming months.

Ukrainian regulators develop crypto tax matrix

NSSMC Chairman Ruslan Magomedov revealed the long-awaited regulatory agency’s crypto tax proposal, aiming to provide taxpayers, regulators, legislators and experts with a practical tool to “allow “to build tax situations for various virtual assets.”

The NSSMC Chairman noted that taxation is “not only a tool to fill the budget, but also an important mechanism to regulate the market”, adding that effective tax policies can prevent financial abuse, minimize the risks of money laundering, and create conditions for the legal and responsible use of digital assets.

Furthermore, with the global interests, adoption and growth of the crypto industry, Ukrainian lawmakers must “implement a clear, effective and fair tax system for virtual asset transactions”. According to the 32-page document, the main challenge of crypto taxation comes from the anonymity and decentralization of digital asset transactions.

“Unlike traditional income (salary, dividend), tax agents (e.g., employers or banks) perform tax obligations, which in the case of virtual assets usually must be performed by the individual himself. This creates the risk of improper declarations and administrative difficulties,” the tax matrix reads.

The proposed tax structure introduces standard and preferential interest rates. Standard rates include an 18% personal income tax on cryptocurrency earnings and a 5% military tax designed to support Ukraine’s defense. Meanwhile, the preferential tax outlines the 5% and 9% rate for a specific crypto category.

It is worth noting that crypto transactions are considered income and taxable, while cryptocurrency exchanges are exempt. Tokens received from staking, mining, hard forks and airdrops “can be taxed as ordinary income or only during the sales phase.” Similarly, gifted virtual assets, donations and wallet transfers are tax-free.

Tax debate in Ukraine

Magomedov details the Tax Matrix, an NSSMC initiative that takes into account experiences with leading jurisdictions such as Germany, Switzerland, Estonia, Singapore, etc., to measure “the advantages and challenges of measuring “virtual asset taxation” to adapt them to the realities and legal fields of Ukraine.”

It is worth noting that Ukrainian President Volodymyr Zelenskyy signed the “Virtual Assets” Act in March 2022, setting a legal framework for regulating the digital asset market. By April 2025, the law has not been implemented as it awaits amendments to the country’s tax laws, which resulted in millions of potential tax revenues.

In December last year, the Ukrainian Parliament Director of Finance, Taxation and Customs Policy revealed that lawmakers are working to legalize digital assets in the first half of 2025.

Nevertheless, the legislation has been postponed due to the tax debate, with experts predicting the bill to be introduced by the end of 2025, while cryptocurrencies may be legalized by 2026.

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