When it comes to the taxation of crypto incomes, it’s a hot topic all around the world. European countries are following a decentralized approach to the regulations of cryptocurrencies. In Germany, bitcoin is not included in the capital-income tax, but if the crypto investment is held over a year it is counted to be taxed as an income. In the UK, cryptocurrencies are treated like foreign currencies. In Ukraine, the tax rate of cryptos is 19.5%. The Ukrainian taxpayers have to choose between two options to report their cryptocurrency incomes; Financial assets or property.
In the interview with Ekonomicheskaya Pravda, The Deputy-finance minister of Ukraine, Sergey Verlanov stated that people are making the crypto income taxation sound more complicated than it really is.
“Two types of operations are possible with cryptocurrency – mining and trading. So, let’s say we bought bitcoin for 1,000 hryvnias; then we were lucky and it went up to 2,000 hryvnias; then we left bitcoin and credited the funds to a bank card. The change is 1,000 hryvnias. We impose income tax on it,” he elaborated, adding: “The rate is 19.5% – whether this is a lot or a little, is a rhetorical question”, He said.
Verlanov stated, that cryptocurrency is a common subject and item among the Ukrainians, even though it has no legal status in Ukraine. “Under the Civil Code of Ukraine – this is an intangible property,” he said. Trading bitcoins, is like buying and selling tanks in the World of Tanks – Verlanov stated referring to the world famous online game.
The Deputy-Finance minister is strongly believing that Ukraine needs to define cryptocurrencies legal status. Verlanov thinks, that crypto exchanges could work as tax agents, once the determination is done.
Author: Sarah Tuuli