The National Commission for Securities and the Stock Market of Ukraine (NCSCFR) has published a complete draft of the taxation of virtual assets, according to which the base rates are 18% of the personal income tax and 5% of the military levy, or preferential options — 5% and 9%. There was a document published Ruslan Magomedov, head of the NCCPFR.
“In the digital age, the issue of taxes for cryptocurrency is not a hypothesis, but a reality that is approaching very quickly. That is why the NKCPFR has developed a matrix that demonstrates options for taxation of various operations with virtual assets – from mining to airdrop. It is based on international experience and adapted to the Ukrainian jurisdiction.” Magomedov noted.
The project provides that the object of taxation can be both net income (profit after deducting expenses) and revenue. The moment of income can be both the receipt of compensation for goods or services, and the moment of alienation of virtual assets in exchange for other assets, including other digital assets.
It is also possible to determine income when exchanging cryptocurrency for currency values or for non-digital assets. The focus of taxation is only on those operations that involve the exchange of virtual assets for currency or traditional assets. The document also provides examples of countries that do not tax crypto-to-crypto transactions: Austria, France, Singapore, Malaysia and Georgia.
The project describes in detail the approaches to taxation of certain actions with crypto assets, such as mining, staking, hard forks and airdrops. According to the document, actions such as the creation of tokens, free provision of services, storage and transfer of virtual assets (in the absence of remuneration), exchange of cryptocurrencies or changes that do not change the essence of the token are not subject to VAT.
Instead, transactions for the supply of goods or services with payment in cryptocurrency, the receipt of remuneration for the storage or transfer of assets, as well as certain types of modifications of tokens that create new value may be subject to VAT. In some cases, tax exemption is possible according to Article 135(1)(e) of the VAT Directive – as services relating to means of payment.
