Ukraine Unveils 18% Income Tax on Crypto Activities in New Bill

Ukraine is moving to formally tax digital asset earnings under a new draft law that proposes an 18% personal income tax on crypto activities such as mining, staking, and airdrops—plus an additional 5% military levy. The bill, now under parliamentary review, is designed to help boost wartime revenue while aligning Ukraine’s crypto policy with EU standards, particularly ahead of the country’s broader MiCA-inspired digital asset framework set to roll out by October 2025.

“This marks the end of Ukraine’s tax-free era for crypto investors,” according to local lawmakers.

Here’s What’s in the Draft Tax Proposal

18% income tax + 5% military tax on:

🧱 Mining.

🔗 Staking.

🎁 Airdrops.

Crypto-to-crypto swaps. Exempt from taxation, similar to Austria, France, and Singapore. Crypto-to-fiat conversions or using crypto for purchases taxable events.

Taxpayers can report either:

• Total revenue before deductions.

• Net income after deducting expenses.

This flexible approach aims to offer clarity and fairness, while encouraging transparency.

VAT Charges May Also Apply

The bill also outlines potential value-added tax (VAT) on certain crypto-related activities: 

• Paying for goods/services with tokens.

• Receiving staking rewards.

• Getting tokens via network upgrades.

However, some VAT exemptions may apply under EU VAT Directive conditions.

HODLing is Safe — For Now

The draft clearly states that merely holding crypto will not trigger taxes. Only selling for fiat or spending it on real-world purchases will. This is a crucial distinction for investors who prefer to HODL or move assets within crypto ecosystems.

A Two-Track Crypto Strategy for Ukraine

The tax reform is just one piece of a larger puzzle. Ukraine’s National Bank is finalizing a MiCA-aligned digital asset regulation framework set for October 2025, aimed at:

• Standardizing crypto oversight.

• Strengthening consumer protections.

• Encouraging responsible market growth.

Officials believe this combined approach will help Ukraine better manage the evolving crypto landscape while meeting urgent fiscal needs.