Ukraine is set to tax crypto-related activities as part of a policy aiming for crypto legalization by 2021.
According to state-owned media agency Ukrinform, the Ukrainian government is drafting a law that will regulate and tax crypto assets. This will “create understandable conditions for conducting activities in the field of virtual assets and virtual currencies.”
Government officials are working to create legal definitions for the most important crypto terms, such as virtual currency, cryptocurrency, virtual assets, Initial Coin or Token Offerings (ICOs or ITOs), cryptocurrency mining, and smart contracts.
Ukraine’s steps toward crypto legalization have received a largely positive response in the cryptoverse. Ivan Liljeqvist, a crypto analyst and developer, expressed his approval of the measures on Twitter:
Great news that Ukraine is understanding the need for clear regulations and definitions for crypto! Regulations and reduced uncertainty are key to driving mainstream adoption. Let’s hope Ukraine drafts innovation-friendly rules, like in Malta and Estonia.https://t.co/7UbFalTb0w
— Ivan on Tech (@IvanOnTech) October 29, 2018
Official confirmation of crypto legalization
The document outlines goals to create a “free and transparent” digital crypto market. It also contains rules that define how to store and use crypto assets. It’s the biggest development since September, when Ukrainian parliament proposed a draft bill regarding cryptos. If the bill becomes law, crypto owners will face a tax of five percent. For business-related profits, however, that tax rate will climb to 18 percent.
Ukraine is also introducing a bill dealing with tax exemptions, although with slightly different definitions of crypto assets. Both proposals should help the Ukrainian crypto industry, which remains largely unregulated and practically illegal.