Ukraine is making progress in its efforts to legalize cryptocurrency, as lawmakers are expected to vote on a bill in the near future, according to local media sources. However, there is still uncertainty surrounding the taxation of digital assets, which could have a significant impact on the country’s growing crypto industry. Ukraine is currently considering a crypto tax rate ranging from 5% to 10% as part of its broader regulatory framework for the digital asset market, with the aim of generating revenue for the state budget and military funding. Alternatively, officials are also exploring the possibility of applying the standard taxation framework, which would involve an 18% income tax and a 5% military levy, resulting in a total tax burden of 23% on crypto earnings. The final decision on the tax structure is still under discussion as lawmakers work towards finalizing comprehensive legislation, which is expected to be completed by mid-2025.
Danil Hetmantsev, the head of the Verkhovna Rada’s finance, tax, and customs committee, has stated that he anticipates the legislation’s first reading to take place by the end of March, followed by a second reading shortly after. If the bill progresses as planned, it could become law by mid-2025, although some officials have expressed skepticism about the timeline.
Finding the Balance Between Regulation and Growth
Taras Kozak, a member of the Kyiv City Council and president of the investment group “UNIVER,” believes that the process may take longer than expected. In an interview, Kozak stated, “I’m optimistic that the bill will pass by the end of the year, but full legalization and taxation will likely come into effect in 2026.”
Ukraine has emerged as a leader in crypto adoption, with digital assets playing a significant role in financial transactions and donations since Russia’s invasion in 2022. The country has embraced blockchain technology to support its economy, but legal uncertainties have hindered its integration into the mainstream. The pending legislation aims to establish clear guidelines for the use and taxation of cryptocurrencies. While the specific tax structure is yet to be finalized, officials have suggested the possibility of a flat-rate tax or a tiered system based on trading volume.
Kozak emphasized the need for Ukraine to have a competitive regulatory framework and cautioned against overly complex taxation that could drive businesses and investors towards offshore platforms.
Delays in the Legislative Process
Despite strong political support, the legislative process has faced delays. In 2021, Ukraine passed a law recognizing cryptocurrencies, but additional amendments were required to align with EU standards. The current bill aims to address these gaps and ensure compliance with global anti-money laundering (AML) and counter-terrorism financing regulations. Hetmantsev stressed the urgency of passing the legislation, as delays could hinder Ukraine’s ability to attract foreign investment in blockchain-based industries. He stated, “We are doing everything possible to expedite the process.”
If the law is enacted, Ukraine will join a growing list of countries that have formally integrated digital assets into their financial and tax systems. However, industry leaders emphasize that the taxation policies implemented will play a crucial role in determining whether the crypto market flourishes or struggles under regulatory pressure.
