Ukraine's parliament backs bill to legalize, tax virtual assets in first reading
Ukraine's parliament passed in the first reading on Sept. 3 a draft law to legalize the country's virtual assets market and set out rules for taxation, lawmaker Yaroslav Zhelezniak said.
Ukraine has one of the world's highest rates of cryptocurrency ownership, with around 16% of the population holding crypto assets before Russia's full-scale invasion, comparable to the U.S.
Despite its popularity, the market remains largely unregulated, with billions of dollars in annual transactions going untaxed.
The bill defines virtual assets as digital property that exists through blockchain technology. The assets would not be recognized as money or used as legal tender in Ukraine, but instead treated as movable property under civil law.
The draft sets a general taxation rate of 18% income tax and 5% military tax on transactions involving virtual assets. In the first year after the law comes into effect, withdrawals converted into traditional currency would be taxed at a preferential 5% rate.
The legislation was passed with the support of 246 lawmakers. Zhelezniak said further amendments will be introduced before the bill's second reading.
