Ukraine Advances Crypto Legalization and Taxation Framework

Ukraine's parliament has taken a decisive step toward regulating the cryptocurrency market, approving the first reading of a bill that introduces a 23% tax on crypto profits. The legislation includes an 18% income tax and a 5% military levy, with a temporary 5% preferential rate for fiat conversion profits in the first year.

The proposed framework aligns with crypto-friendly jurisdictions but notably excludes crypto-to-crypto and stablecoin transactions from taxation—a potential nod to more flexible policies in the EU and Asia. Lawmakers acknowledge significant revisions are likely before the second reading, particularly regarding regulatory oversight and enforcement mechanisms.

"There will be a lot of changes before the second reading," said Yaroslav Zhelezniak, a member of parliament, highlighting unresolved questions about which agency will oversee the market. The National Bank of Ukraine and the National Securities and Stock Market Commission are both under consideration.