Ukraine Could Take Until 2026 To Legalize Crypto As Tax Debate Continues

Recent reports revealed that Ukraine’s lawmakers “remain debating” crypto tax rates amid the government’s push to legalize digital assets this year. An expert suggested that the upcoming bill could take longer than expected as the parliament considers lower taxation.

Ukraine’s Crypto Legalization Could Take Until Next Year

In a Thursday interview with local news media, Taras Kozak, a member of Ukraine’s securities regulator advisory group, shared new details on Ukraine’s efforts to legalize cryptocurrencies this year, the potential timeline, and tax rates on digital assets’ income.

The expert disagreed with Danylo Hetmantsev, head of the Verkhovna Rada’s Committee on Finance, Tax, and Customs Policy, who forecasted the bill would be passed in the coming months.

On February 7, the lawmaker said the government was working to ensure the crypto law was adopted by summer 2025. Hetmantsev added that the first draft would be “ready for a first reading in the first quarter” of the year, followed by a second reading in Parliament. However, he noted that the lawmakers are still working on the details related to the crypto taxation measures.

As reported by Bitcoinist, Hetmantsev announced in December that the Parliament’s working group was working alongside the National Bank and the International Monetary Fund (IMF) on a draft bill to be introduced in early 2025, aiming to legalize digital assets in the first half of the year.

Kozak disagreed with the lawmaker’s timeline, stating that crypto’s legalization in Ukraine could take until next year. According to the report, the expert is optimistic that the long-awaited bill will pass all the readings in the Verkhovna Rada and be signed by the end of this year.

Under this timeline, crypto would be legalized, and income from digital assets could be taxed starting in 2026.

Lawmakers Debate Crypto Taxation

The expert affirmed that the final tax rate is key, as Ukrainian investors and businesses using crypto “are not against replenishing the state budget.” According to Kozak, Ukrainians are willing to pay around a 5% tax on their crypto income, but the taxation cannot be delayed anymore.

Ukrainian President Volodymyr Zelensky signed the “On Virtual Assets” law in March 2022, setting the legal framework for regulating the country’s digital asset market. However, the law has not been implemented as it awaits amendments to the Ukrainian Tax Code.

This resulted in the loss of millions in potential tax revenue, as the absence of regulations meant that exchanges had no legal obligations to pay taxes to the Ukrainian authorities for the revenue obtained from crypto assets.

Kozak suggested implementing a small tax, “from 5% to 10%. All citizen income should be taxed because our state lives on this money, our army fights, we buy weapons, and we maintain security,” he stated.

The report affirms the government is considering a standard rate of 18% on personal income plus a 5% military levy. Additionally, investors who can’t prove their initial investments could face up to a 23% tax on their total holdings.

Hetmantsev previously explained that tax exemptions won’t be applied to digital assets as they are taking a “very cautious approach to using cryptocurrencies for tax exemptions” after consulting with the IMF and European experts.