Ukraine eyes up at 10% tax on crypto as legalization gains steam

Ukraine is advancing efforts to legalize crypto, with lawmakers expected to vote on a long-awaited bill in the coming months, local media reported on Feb. 28.

However, uncertainty remains over how digital assets will be taxed, a key issue that could impact the country’s growing crypto sector. Ukraine is exploring a crypto tax rate between 5% and 10% as part of its broader efforts to regulate the digital asset market while generating revenue for the state budget and military funding.

However, officials are also considering applying the standard taxation framework, which would impose an 18% income tax plus a 5% military levy, bringing the total tax burden on crypto earnings to 23%.

The final decision remains under discussion as lawmakers work toward passing a comprehensive regulatory framework, with legislation expected to be finalized by mid-2025.

Danil Hetmantsev, head of the Verkhovna Rada’s finance, tax, and customs committee, said he expects the legislation’s first reading by the end of March and a second reading soon after. If the bill moves forward as planned, it could be enacted by mid-2025. However, some officials remain skeptical about the timeline.

Balancing regulation and growth

Taras Kozak, a member of the Kyiv City Council and president of the investment group “UNIVER,” suggested the process may take longer.

Kozak said in an interview:

Ukraine has emerged as a leader in crypto adoption, with digital assets playing a vital 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 mainstream integration.

The pending legislation aims to establish clear guidelines for the use and taxation of cryptocurrencies. While the exact tax structure has yet to be finalized, officials have hinted at a possible flat-rate tax or a tiered system based on trading volume.

Kozak said that “Ukraine needs a competitive regulatory framework” and warned that overly complex taxation could push businesses and investors toward offshore platforms.

Legislative delays

Despite strong political support, the process has faced delays. In 2021, Ukraine passed a law recognizing cryptocurrencies, but it required additional amendments to align with EU standards.

The current bill seeks to address those gaps, ensuring compliance with global anti-money laundering (AML) and counter-terrorism financing regulations.

Hetmantsev emphasized the urgency of passing the legislation, arguing that delays could hinder Ukraine’s ability to attract foreign investment in blockchain-based industries.

He said:

“We are doing everything possible to expedite the process.”

If the law is enacted, Ukraine will join a growing list of countries formally integrating digital assets into their financial and tax systems.

However, industry leaders stress that taxation policies will play a crucial role in determining whether the market flourishes or struggles under regulatory pressure.