Ukraine Proposes Tax on Crypto, Mining, Staking and Airdrops

The Ukrainian government has unveiled a proposal to impose taxes on crypto transactions, mining activities, staking, and airdrops. The latest initiative is currently in parliament for review.

During Ukraine’s digital transformation, special attention is drawn to the growing role of crypto assets. In light of global trends and increasing interest in decentralized financial technologies, Ukrainian lawmakers must implement a clear, effective, and fair taxation system for digital asset transactions.

Ukraine Applies Tax on Crypto Transactions

According to the latest proposal, the government plans to levy an 18% tax on capital gains from buying, selling, or trading crypto assets. Similar to traditional financial markets, profits earned through crypto transactions will be subject to tax.

Tax will also apply to individuals and businesses, ensuring a broad reach across the crypto ecosystem. If approved, the proposal will mark a significant step in Ukraine’s ongoing efforts to regulate the digital economy while providing clarity for investors and companies operating in the space.

The government also added that crypto miners and stakers will face a 5% tax on the income generated from their activities. Mining, which requires significant computational power to verify transactions and secure the network, has been a point of focus due to its environmental impact and energy consumption. Staking, a popular method of earning through crypto holdings, will also fall under the tax regime.

Interestingly, one of the newest aspects of the proposed tax law involves airdrops, the process by which crypto projects distribute free tokens to holders of existing crypto assets. Ukraine intends to tax airdropped tokens as income, requiring individuals to report them on their tax filings and pay applicable taxes. This could impact the airdrop-driven promotions often seen within the crypto sector.

Reasons Behind The Proposal

Notably, the government stated that the Matrix, a system for taxing digital assets, was developed at the initiative and direct involvement of the National Securities and Stock Market Commission (NSSMC). The proposal noted that the experience of leading jurisdictions such as Germany, Switzerland, Estonia, Singapore, and others was considered, as they have already established their approaches to tax accounting for digital asset transactions.

For clarity, the government emphasized that introducing these taxes is necessary to ensure that the crypto market operates within a legal and regulated framework. By imposing taxes, the state aims to generate revenue, combat money laundering and tax evasion, and align with global standards. Meanwhile, aside from crypto taxes, the proposed tax law also included a 5% military levy.