I found many references to this explanation, but it has already been removed from the DPS website. As far as I understand, this was before the Virtual Assets Act. However, the information is interesting.
The explanation regarding the taxation of transactions with cryptocurrencies from the Ukrainian tax authorities is quite clear, although it raises many questions. The DPS of Ukraine notes that, despite the lack of a defined legal status of cryptocurrencies in the country, income received from operations with them is subject to taxation.
1. What is taxable?
It is not the profit (that is, the difference between the purchase and sale) that is subject to taxation, but the entire income received from the sale of cryptocurrency. For example, if you bought 10,000 USD of Bitcoin and sold it for 30,000 USD, the tax is calculated on the entire sale amount of 30,000 USD, not on the net profit of 20,000 USD.
2. Tax rates:
Personal income tax: 18% of income.
Military levy: 1.5% additional.
3. How does it work?
If income from cryptocurrencies is received through residents of Ukraine, they are included as "other income". If the payment comes from abroad, it is classified as foreign income. In any case, the taxpayer must submit the annual return and pay the tax himself, if the source of income is not a tax agent.
Criticism
Such taxation looks more like a penalty for innovation than a real regulatory mechanism. Paying taxes on full income (without taking into account expenses) is an absurdity that encourages "gray" schemes and the transition to offshore. Imagine if taxes were assessed on the full value of the property you sold, excluding its original price. It's not just unfair, it discourages investors and entrepreneurs.
In addition, such a policy creates the ground for double taxation: you have already paid the commission of the exchange or network, and now add taxes on all income. Question: does the state want to stimulate the digital economy or simply monopolize citizens' funds? The answer, unfortunately, is obvious.
