Ukraine might become a tax cryptoheaven

ukraine-crypto

Attempts to settle the definition of crypto-currency, as well as the other issues related to their mining and use in Ukraine, have been carried out for a long time. The first officially registered bills were submitted to Ukrainian Parliament (Verkhovna Rada) on October 6, 2017 (the main bill) and 10.10.2017 (alternative bill). The first defines the cryptocurrency as the program code, the second – as the financial asset. At the same time, none of the draft laws introduces changes to the current tax legislation of Ukraine in order to clarify the taxation of operations with cryptocurrencies and ICO-tokens.

September 14, 2018, in Ukrainian Parliament (Verkhovna Rada), was submitted a bill to amend the Tax Code of Ukraine on the taxation of transactions with the virtual assets in Ukraine. The bill introduces the concept of a “virtual asset”, which includes both cryptocurrencies and ICO-tokens. Cryptocurrency is defined as a virtual asset in the form of a token, which functions as a mean of exchange or preservation of value.

The bill regulates the issues of taxation of profits. The profit from operations with cryptocurrencies is the difference between the sum of the received currency values as a result of the selling of the cryptocurrency and the cost of purchasing the cryptocurrency or its mining. The income tax rate is set at 5% (the base rate is 18%). Such a preferential rate will be in force until 2024.

The bill exempts from VAT payments for the production of tokens, exchange operations on crypto-exchanges, the exchange of cryptocurrencies and tokens for fiat money.

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