Verkhovna Rada Will Consider Tax Incentives for Ukrainian Crypto Market

Published on 03 Oct. 2018
Cocktail on the beach

Ukrainian parliament will consider the amendments to the Tax Code. They can potentially provide a decade of tax holidays for the members of the local digital currency market.

In the first week of October, Verkhovna Rada will discuss a law project that offers amendments to the national Tax Code. It suggests a tax immunity for all members of the crypto market until the end of 2029.

The project was introduced by the independent deputy Yurii Derevianko, the representative of the political party New Forces Movement. It presupposes the exemption from the tax on income received from the cryptocurrency transactions. The project suggests a tax-free period until December 31, 2029, for both individuals and entities.

Derevianko named the crypto market players a creative class and called the parliament to legalize this innovative segment. He considers the offered tax holidays the means to increase investments in the crypto sector and promote the development of Ukrainian crypto market with the final benefit for the national economy.

Besides tax holidays, Derevianko recommends introducing a number of specific terms and definitions such as token, cryptocurrency, mining, virtual asset issuer and virtual currency operations. For instance, the project defines cryptocurrency as “an invisible digital asset that defines units of value, the direct ownership on which are fixed according to the distributed ledger (blockchain) records.” Also, the people’s deputy offers to introduce a moratorium on the VAT taxation of the imported cryptocurrency equipment.

Although the crypto enthusiasts appreciate the goals and ideas of the offered law project, Verkhovna Rada will hardly approve it. The discussions in the mass media and related crypto resources are not optimistic. Another law project on Tax Code changes has more prominent chances to be adopted. It has been introduced by 23 people’s deputies in the middle of September. It says that the state will regulate the operations between cryptocurrency and fiat only. It offers a withdrawal tax in the size of 6.5%.

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