TAXATION OF CRYPTOCURRENCIES AND FUNDS IN FINANCIAL INSTITUTIONS WITH FOREIGN RESIDENCE

The very first, most famous and most expensive cryptocurrency Bitcoin was created back in the relatively distant and calm year for us 2009. Since then, the number of such “currencies” has grown rapidly, in particular, according to data from the CoinMarketCap website, as of the end of 2024, this market has reached a level of more than 10,038 cryptocurrencies.

Even Donald Trump and his wife Melania have their $Trump meme coin and $MELANIA meme coin. Trump's sons Eric and Donald Jr. announced their own cryptocurrency venture last year.

America has begun the process of creating a national strategic reserve of five cryptocurrencies, which, in particular, will include Bitcoin.

Everything indicates the further active growth of the cryptocurrency market, and citizens of Ukraine have long been its participants.

For example, in 2024, Ukrainian officials declared more than 2.1 thousand cryptocurrency assets, which is 2.2 times more than before the full-scale invasion.

Cryptocurrency Status and taxation in Ukraine

Currently, the circulation of cryptocurrency at the state level is not regulated by law.

The Law “On the National Bank of Ukraine” refers to crypto as a cash surrogate, which there are any documents in the form of banknotes, different from the currency of Ukraine, issued in circulation not by the National Bank of Ukraine and produced for the purpose of making payments in economic circulation, except for currency values.

Article 32 of the Law “On the National Bank of Ukraine” prohibits the issuance and circulation on the territory of Ukraine of other monetary units and the use of cash surrogates as a means of payment.

The definition of the Law of Ukraine “On Preventing and Countering Legalization (Laundering) of Criminally Obtained Income, Financing of Terrorism and Financing of Proliferation of Weapons of Mass Destruction” refers cryptocurrency to”a digital expression of value that can be traded digitally or transferred and which can be used for payment or investment purposes. In fact, the law defines it as a virtual asset.

On 17.02.2022, the Law “On Virtual Assets” was adopted, which was supposed to regulate the circulation of crypto, it will come into force after amendments to the Tax Code of Ukraine on the peculiarities of taxation of transactions with virtual assets.

According to the new law, a virtual asset is an intangible asset that is an object of civil rights, has a value and is expressed by a set of data in electronic form. He will be able to certify property rights, in particular the rights of claim to other objects of civil rights.

Therefore, in Ukraine, cryptocurrencies do not have the status of means of payment, are not money, foreign currency or electronic money. Therefore, the state actively normalizes the status of such an asset for control and taxation.

In particular, the National Securities and Stock Market Commission (NCCIF) in April 2025 presented on its website at the link https://www.nssmc.gov.ua/wp-content/uploads/2025/04/matrytsia-opodatkuvannia-va-1.pdfmatrix of taxation of virtual assets.

The matrix has become the subject of debate at the state level. Thus, the Chairman of the Parliamentary Committee on Finance, Tax and Customs Policy Danylo Getmantsev immediately denied the formality of such mechanisms.

However, according to various reports, by the end of 2025, it is planned to finalize and amend the Tax Code of Ukraine, which will trigger the operation of the Law “On Virtual Assets”.

At the same time, the state introduces mechanisms for international monitoring of assets and exchange of information on income.

20.03.2023 The Verkhovna Rada of Ukraine adopted the Law of Ukraine No. 2970-IX “On Amendments to the Tax Code of Ukraine and Other Legislative Acts of Ukraine on the Implementation of the International Standard of Automatic Exchange of Information on Financial Accounts” (Law No. 2970-IX), which entered into force on 28.04.2023.

Ukraine has already joined the international system of automatic exchange of information on financial accounts in accordance with the General Reporting Standard CRS, approved by the Council of the Organization for Economic Cooperation and Development (OECD). The members of the organization include about 120 jurisdictions, including countries such as: Australia, Austria, Belgium, Great Britain, Greece, Denmark, Estonia, Israel, Spain, Iceland, Ireland, Italy, Canada, Korea, Latvia, Luxembourg, Mexico, Germany, Norway New Zealand, Netherlands, Poland, Portugal, Slovakia, Slovenia, USA, Turkey, Hungary, Finland, France, Czech Republic, Chile, Switzerland, Sweden, Japan.

This means that Ukrainian financial institutions conduct due diligence on residency. Information about the accounts of foreigners enters the State Tax Service of Ukraine, and from there the processed information is transferred to the tax authorities of the jurisdictions of the participants of the international system of automatic exchange of information.

Information about the accounts of our citizens in foreign banks is transferred to Ukraine in a similar manner.

In September 2024, the State Tax Service conducted the first exchange of information. At the same time, paragraph 73.6 of Article 73 of the Tax Code of Ukraine prohibits disclosing information about available state tax accounts, even at the request of their owner.

The Ministry of Finance of Ukraine published information that primarily the exchange of information concerns the verification of the accounts of individuals with a balance or value of more than 1 million US dollars as of June 30, 2023 (high-cost accounts of the Federal Tax Service).

The exchange of information on accounts with low cost individuals (with a balance or value of less than $1 million as of June 30, 2023), as well as accounts of organizations (exceeding the threshold of $250 thousand) will be included in the reports, the exchange of which is scheduled for September 30, 2025.

So, the cost of selling an asset such as cryptocurrency, both in Ukraine and abroad is determined by the tax base. Therefore, residents who received income with a source of origin in Ukraine or abroad, and non-residents with income in Ukraine until 01.05.2025 are obliged to declare this income, and in the future, if there is a corresponding obligation to pay taxes and fees.

As a general rule, the tax rate is as follows: 18% personal income tax (personal income tax) and 5% military fee.

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