How to Report NFT Profit in Ukraine: Complete Tax Guide 2024

## Introduction to NFT Taxation in Ukraine
With the explosive growth of NFTs (Non-Fungible Tokens), Ukrainian creators and investors are capitalizing on digital art, collectibles, and virtual assets. However, many remain uncertain about tax obligations. This guide explains how to legally report NFT profits in Ukraine, covering regulations, calculations, and filing procedures to ensure compliance with the State Tax Service.

## Are NFT Profits Taxable in Ukraine?
Yes. According to Ukraine’s Tax Code, profits from NFT sales qualify as taxable income. Key regulations include:
– **Residency Rules**: Ukrainian tax residents pay taxes on worldwide NFT income.
– **Tax Rates**: Standard 18% personal income tax + 1.5% military duty on profits.
– **Non-Residents**: Taxed only on Ukraine-sourced NFT income (e.g., sales to Ukrainian buyers).

## Step-by-Step Guide to Reporting NFT Income
Follow this process to declare NFT profits correctly:

1. **Calculate Your Profit**
– Profit = Selling Price – (Acquisition Cost + Associated Expenses)
– Deductible expenses: Gas fees, marketplace commissions, minting costs, and transaction charges.

2. **Convert Crypto to UAH**
– Use the National Bank of Ukraine’s exchange rate on the transaction date.
– Document conversion sources for audit purposes.

3. **File Tax Declaration (Form 3-ПДФО)**
– Submit annually by May 1st for the previous tax year.
– Declare profits under “Income from Property Sale” (Code 170).

4. **Pay Taxes Due**
– Transfer owed amounts (18% + 1.5%) by August 1st.
– Use payment codes:
– Personal Income Tax: КБК 73210800
– Military Duty: КБК 73210900

## Record-Keeping Best Practices
Maintain these documents for 3 years:
– Wallet transaction histories
– NFT purchase/sale agreements
– Receipts for deductible expenses
– Screenshots of exchange rates used

## Penalties for Non-Compliance
Failure to report NFT income may result in:
– Fines up to 25% of unpaid taxes
– Accrued interest on overdue amounts
– Criminal liability for large-scale evasion

## FAQ: Reporting NFT Profits in Ukraine

**Q: Do I pay taxes if I sell NFTs for cryptocurrency?**
A: Yes. Cryptocurrency proceeds must be converted to UAH equivalent and taxed as income.

**Q: How are NFT losses handled?**
A: Losses can offset other capital gains but aren’t refundable. Report them in your 3-ПДФО declaration.

**Q: Is NFT income taxed differently for businesses?**
A: Companies pay 18% corporate tax on NFT profits. Sole proprietors (ФОП) use simplified tax systems if registered.

**Q: Are airdropped or gifted NFTs taxable?**
A: Yes. Market value at receipt is considered taxable income.

**Q: Can I deduct NFT creation costs?**
A: Only if you’re a registered entrepreneur. Personal creators can’t deduct labor costs under current rules.

## Key Takeaways
Always declare NFT profits through Form 3-ПДФО by May 1st. Maintain meticulous records, convert crypto to UAH using official rates, and consult a Ukrainian tax advisor for complex cases. As blockchain regulations evolve, staying compliant protects you from penalties while legitimizing your digital asset activities.