The Draft Law No. 10225-d dated April 24, 2025, “On Amendments to the Tax Code of Ukraine and Certain Other Legislative Acts of Ukraine Regarding the Regulation of the Virtual Asset Market in Ukraine” aims to regulate the turnover of virtual assets (VA). These amendments concern the definition of virtual assets, the taxation of income from VA transactions, and the administration of the virtual asset market.
The draft law was adopted in the first reading and aims to establish clear rules for the development of this new economic sector, ensuring proper taxation and control over transactions involving digital assets.
The bill proposes the following:
Definition of Virtual Asset – a specific type of digital object (property) that exists in electronic form thanks to distributed ledger technology (blockchain).
The bill divides all virtual assets into three main categories:
- Asset-backed tokens – their value is stabilised by being pegged to assets such as currency or property;
- Electronic money tokens – pegged to a single official currency;
- Other virtual assets – a category that covers assets not belonging to the first two types. This category will be defined by the regulator, which will determine which virtual assets (excluding asset-backed tokens and electronic money tokens) fall under this classification.
Ownership of VA is acquired through issuance, legal transaction, law, or court decision, and is confirmed by possession of access means, such as cryptographic keys. The law provides a presumption of legal ownership unless otherwise established by a court.
Proposed tax provisions:
1) Personal Income Tax:
- Separate taxation for income from VA transactions (distinct from other income and investment profits);
- Taxable income will be the profit from VA transactions, calculated as the difference between the revenue from sales and the cost of acquiring the VA during the year;
- Individuals must declare income and pay taxes themselves;
- Exemptions: a) income from exchanging VA for other VA, and income from the sale of VA within the minimum wage threshold; b) the value of VA received through their issuance or as a free transfer from issuers or offerors, and/or received in exchange for personal data;
- Losses from previous periods (if sold for less than purchased – a high-risk market) will be considered until they are offset (with some exceptions);
- For VA acquired before the law comes into force, individuals can opt for a preferential personal income tax rate of 5% (+5% military tax) if sold within 2026; after that, the tax rate will rise to 18% (+5% military tax).
2) Corporate Income Tax:
- New adjustments to financial results (similar to how securities transactions are taxed);
- The list of expenses eligible for deduction when conducting VA transactions will be determined by the Ministry of Finance, based on the regulator’s submission.
3) Value Added Tax (VAT):
- Not subject to VAT: Transactions related to the issuance, placement into management, sale, exchange, and redemption of virtual assets, except for: a) the sale and exchange of NFTs; b) the sale and exchange of VA that represent the right to demand property transfer or provision of services; Services provided by suppliers of services related to VA turnover (except for consulting services, which will be taxed on general terms).
4) Simplified Tax System:
- Entities paying a single tax are prohibited from conducting VA transactions;
- Providers of services related to VA turnover cannot use the simplified tax system.
5) Administration:
- Service providers related to VA turnover offering services to Ukrainian residents are required to register with the tax authorities and submit annual reports on VA transactions for physical and legal persons who are Ukrainian residents (a step towards the gradual introduction of CARF and implementation of DAC8 directives);
- Penalties will be imposed on VA service providers who fail to meet these obligations, applied at reduced rates during the transition period (in 2026 – 10% of the established penalty amount, from 2027 to 2029 – 25% of the penalty amount).
These proposed amendments to the Tax Code are set to take effect on January 1, 2026.
