Ukraine’s high monetary regulator is floating the concept of taxing cryptocurrency as private earnings, with doable carveouts for sure overseas asset-backed stablecoins, underneath a newly proposed taxation matrix printed on Tuesday.

In a translated letter introducing the potential new strategy, Ruslan Magomedov, head of Ukraine’s Nationwide Securities and Inventory Market Fee, mentioned that efficient tax coverage is a crucial step in stopping monetary abuse and facilitating the “authorized and accountable use of digital property.”

“Establishing honest and comprehensible taxation guidelines can also be a prerequisite for attracting funding and integrating the Ukrainian digital asset market into the worldwide monetary market,” Magomedov added.

Below the NSSMC’s urged tax scheme, sure crypto transactions — basically these through which non-stablecoin cryptocurrencies are cashed out for fiat foreign money or exchanged for items or companies, and through which there have been no monetary losses from the transaction — could be taxed at Ukraine’s customary private earnings tax price of 18%, plus the extra 5% wartime levy that went into impact final December.

Crypto-to-crypto transactions wouldn’t be topic to taxation underneath the proposed tax matrix, which is in step with how a number of different European nations together with Austria and France, in addition to crypto-friendly jurisdictions like Singapore, deal with crypto taxation.

As a result of Ukraine’s tax code exempts any earnings generated from transactions with overseas trade values from being taxed, the NSSMC urged “it is sensible to contemplate a preferential price or exemption from taxation” for overseas asset-backed stablecoins and sure asset-referenced tokens (ARTs). The urged preferential tax price underneath the matrix could possibly be both 5% or 9%.

The matrix additionally provided a wide range of taxation choices for different varieties of crypto transactions, together with mining, which the NSSMC urged could possibly be thought of a “enterprise exercise”; staking, which the regulator mentioned may both be “thought of as enterprise captive earnings” or taxed solely on the cash-out stage; in addition to hard-forks and airdrops, which the regulator mentioned may both be taxed as atypical earnings or solely on the cash-out stage.

Ukraine had beforehand launched a draft legislation equally amending the nation’s tax code to cowl cryptocurrency in 2023. A 2024 evaluation from Swiss blockchain analytics agency International Ledger discovered that Ukraine may stand to gather over $200 million in annual taxes from crypto transactions.

Ukrainian President Volodymyr Zelensky formally legalized the nation’s cryptocurrency sector in 2022, figuring out the business’s regulators and giving them the go-ahead to create particular rules. The Nationwide Financial institution of Ukraine is at present engaged on a draft legislation primarily based on the European Union’s (EU) Markets in Crypto Belongings (MiCA) regulation.

Ukraine has been a candidate for EU membership since 2022.

CoinDesk reached out to the NSSMC for a remark.