Ukraine floats 23% tax on some crypto income, exemptions for stablecoins
Ukraine’s financial regulator has proposed taxing certain crypto transactions as personal income at a rate of up to 23% but excluding crypto-to-crypto transactions and stablecoins.
Crypto transactions would be taxed at 18% with a 5% military levy on top as part of the proposed framework, released on April 8 by Ukraine’s National Securities and Stock Market Commission.
NSSMC Chairman Ruslan Magomedov said in an April 8 statement that “the issue of crypto taxes is not a hypothesis, but a reality that is fast approaching.”
He added that the agency created the framework to help lawmakers make an “informed resolution” by considering each suggestion’s advantages and disadvantages because “these aspects can have a critical impact on the market and tax liability.”
Under the NSSMC’s proposed crypto framework, a tax will be applied when crypto is cashed out for fiat currency or exchanged for goods or services.
Crypto-to-crypto transactions wouldn’t be taxed, bringing Ukraine in line with other European countries, including Austria and France, as well as crypto-friendly jurisdictions like Singapore, the NSSMC said.
The regulator says it “makes sense” to exclude stablecoins backed by foreign currencies or only apply a 5% or 9% tax because Ukraine’s tax code already excludes income from transactions in “foreign exchange values.”
A translated excerpt of the NSSMC’s report said stablecoins backed by foreign currencies could be exempt from taxation. Source: NSSMC
Mining, staking, hard forks and airdrops
Other crypto-related activities, such as mining, staking and airdrops, are also addressed in the framework which floated a few options for taxation.
The NSSMC said crypto mining is generally considered a business activity, but there might be a general tax-free limit for certain crypto transactions, including mining.
Under the framework, staking could be considered as “business captive income” or only taxed if the crypto is cashed out for fiat currencies. While hard forks and airdrops could be taxed either as ordinary income or when the tokens are cashed.
Related: Ukraine officials get training on crypto and virtual assets investigation
The regulator suggests a tax-free threshold could help “relieve the burden on small investors” and is common in other jurisdictions.
Exemptions for donations, transfers between family members, and holders who keep their crypto for a set amount of time are also flagged as possibilities. However, the NSSMC says the exemption might not apply to non-custodial crypto wallets.
Last December, Daniil Getmantsev, head of the tax committee of Ukraine’s parliament, said a draft bill to legalize cryptocurrencies was under review and expected to be finalized early this year.
Ukrainian President Volodymyr Zelenskyy first signed a law establishing a legal framework for the country to operate a regulated crypto market in March 2022.
Magazine: New ‘MemeStrategy’ Bitcoin firm by 9GAG, jailed CEO’s $3.5M bonus: Asia Express
As US conservatives rapidly shape the crypto landscape through policy, funding and grassroots adoption, progressives remain divided and hesitant. Progressives lack a unified strategy and risk losing relevance.
Following its latest freeze of nearly $86K in stolen USDt, Tether’s enforcement capabilities are again in the spotlight — raising questions about centralized control in stablecoin ecosystems.
Politics
£104bn of water industry investment will come from bill payers, environment secretary concedes
Steve Reed has conceded that the bulk of the £104bn of water industry investment which he boasts Labour has attracted since coming to office will come from bill payers.
In an interview with Sky News, the environment secretary sought to blame the previous Tory government for a string of high profile investors walking away from the sector over the last year.
Mr Reed does not accept claims that further threats to jail water bosses and promises to curb price rises have deterred investment.
Instead, he told Sky News that “by bringing in the £104bn of private sector investment that we secured at the end of last year, we can make sure that the investment is going in to support” the industry.
When challenged that the £104bn was total expenditure not total investment, and that bill payers would pay back this expenditure over the coming decades, Mr Reed conceded this was right – and the money ultimately is coming from bill payers.
“The money comes in from investors up front so we can do that spending straight away,” he said.
“Over decades, the investors got a modest return from the bills that customers are paying. That’s how investment works.”
Some investors have warned they do not think it viable to fund the UK water sector because of the hostile political tone of ministers and lack of certainty.
Ministers have said the government does not want to renationalise water as it would mean years of legal wrangling and cost a lot of money.
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Minister rules out nationalising the water
Labour has launched a record 81 criminal investigations into water companies over sewage dumping since winning the election last year.
Water company bosses could be jailed for up to five years and the companies fined hundreds of millions of pounds if they are found guilty.
Mr Reed committed to not interfering with those prosecutions, saying it would be “highly inappropriate” for any minister to do so.
Read more:
Key recommendations from the water report
Labour to eliminate unauthorised sewage spillages in 10 years
He rejected suggestions ministers will be pressured to ensure water bosses do not serve jail time as this will deter investors.
“It’s a judicial process, it would be highly inappropriate for any ministerial interference in the process,” Mr Reed said.
“They will work their way through the court system, as they should do, and ministers will decide on sanctions after.”
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