How to Pay Taxes on Crypto Income in Ukraine: 2024 Complete Guide

Cryptocurrency investments can generate significant profits in Ukraine, but many overlook the tax implications. With Ukrainian authorities tightening crypto regulations, understanding how to legally report and pay taxes on digital asset income is crucial to avoid penalties. This guide breaks down everything you need to know about crypto taxation in Ukraine, including rates, calculations, and compliance steps.

## Understanding Crypto Taxation in Ukraine
Ukraine treats cryptocurrency as an “intangible asset” subject to taxation under the Tax Code. Both residents and non-residents earning crypto income from Ukrainian sources must declare and pay taxes. The State Tax Service (STS) monitors transactions via exchanges and blockchain analytics, making compliance essential. Key laws include:
– **Tax Code of Ukraine (Article 164.2)**: Defines crypto as taxable property.
– **Draft Law 10225-1**: Proposes clearer regulations (pending parliamentary approval as of 2024).

## Types of Crypto Transactions Subject to Tax
Taxable events occur when you:
– Sell cryptocurrency for fiat (e.g., UAH, USD, EUR)
– Trade one crypto for another (e.g., BTC to ETH)
– Receive mining or staking rewards
– Earn crypto from freelancing or salaries
– Get airdrops or forks (if converted to fiat or used)

*Non-taxable activities* include:
– Buying crypto with fiat
– Holding crypto without selling
– Transferring between your own wallets

## Crypto Tax Rates in Ukraine (2024)
### For Individuals
– **Personal Income Tax (PIT)**: 18% on profits (selling price minus acquisition cost).
– **Military Duty**: 1.5% surcharge on the same profit base.
– *Total effective rate*: **19.5%**.

### For Businesses & Entrepreneurs
– **Corporate Tax**: 18% on net crypto income (for legal entities).
– **Single Tax**: 3–5% for sole entrepreneurs under simplified system (Group 3).

## How to Calculate Your Crypto Tax Liability
Follow these steps:
1. **Determine Profit**: Selling price minus purchase cost (including fees).
2. **Use FIFO Method**: Ukraine defaults to “First-In, First-Out” for cost basis calculation.
3. **Convert to UAH**: Use the National Bank of Ukraine exchange rate on the transaction date.

*Example*: You bought 1 BTC for ₴800,000 and sold it for ₴1,200,000. Profit = ₴400,000. Tax owed = ₴400,000 × 19.5% = ₴78,000.

## Reporting and Payment Process
1. **File a Declaration**: Submit Form 1-DFL via the Diia app or at a tax office by **May 1st** of the year following the income.
2. **Pay Taxes**: Transfer funds to the State Treasury by August 1st using:
– Online banking
– Tax office terminals
– Diia portal
3. **Keep Records**: Maintain logs of all transactions (dates, amounts, wallet addresses) for 3 years.

## Deadlines and Penalties
– **Annual Deadline**: Declare prior-year income by May 1; pay by August 1.
– **Late Filing Fine**: 10–20% of unpaid tax.
– **Underpayment Penalty**: 120% annual interest on overdue amounts.
– **Criminal Liability**: For evasion over ₴1.1 million (possible imprisonment).

## Recent Regulatory Updates
– **2023**: STS clarified crypto-to-crypto trades as taxable events.
– **2024**: Draft Law 10225-1 proposes:
– Reduced PIT to 9% for crypto gains after 2025
– Mandatory exchange reporting for transactions >₴400,000

## Tips for Compliance
– Use crypto tax software (e.g., Keeper, CoinTracking) for automated calculations.
– Consult a Ukrainian tax advisor specializing in digital assets.
– Declare losses to offset future profits (carry forward 3 years).
– Report foreign exchange accounts holding crypto.

## Frequently Asked Questions (FAQ)
### Is cryptocurrency legal in Ukraine?
Yes, but it’s not legal tender. Transactions are regulated and taxable under Ukrainian law.

### Do I pay tax if I hold crypto without selling?
No—tax applies only when you realize gains (e.g., selling, trading, or spending crypto).

### How is crypto mining taxed?
Mined coins are taxed as income at their market value when received. When sold, additional tax applies to profits.

### Are NFTs subject to taxation?
Yes—NFT sales and trades follow the same 19.5% tax rate as other crypto assets.

### Can I deduct crypto losses?
Yes, capital losses reduce taxable income. Report them in your annual declaration.

### What if I use a foreign exchange?
Ukrainian residents must declare global crypto income. Foreign platforms may share data with Ukrainian authorities under CRS agreements.

Staying compliant protects you from fines and supports Ukraine’s evolving digital economy. Always verify details with the State Tax Service or a qualified professional.