Ukraine Bill 9083-1 Introduces Tax Holiday For Cryptocurrency Businesses
A draft bill proposing tax breaks for entrepreneurs and companies dealing with cryptos has been filed in the Verkhovna Rada, Ukraine’s parliament. The architects of the bill have called for tax exemptions for entities working in the sector until the end of 2029.
Yuri Derevyanko, one of the leaders of the Movement of New Forces party, put forth the new proposal to decrease cryptocurrency businesses from taxation for at least a decade. Bill 9083-1 has promoted through various important parliamentary committees this month, including those responsible for budgetary matters, financial policies, customs regulations, and European integration.
Yuri described digital currency market players as an inventive class and implored Parliament to legalize this innovative section. He is optimistic that the suggested tax holiday will assist channel a lot of investments into the industry, encouraging the growth and development of the Ukrainian digital currency market to the uttermost benefit of the country economy.
Besides the tax measures, Yuri suggests introducing a variety of specific terms and definitions, such as crypto, token, virtual asset issuer, virtual currency transactions, and mining. For example, a digital currency is defined by the bill as a physical digital asset, with the full right to possession recorded on DLT.
Yuri further suggests imposing a moratorium on the taxation of digital currency mining equipment must not be subject to import tariffs and must also be VAT-free especially when sold on the domestic market.
If adopted, the proposed legislation would result in amendments to the Ukrainian tax code. It would provide tax breaks on income earned from all cryptocurrency transactions. Both corporate entities and private individuals dealing in cryptocurrencies would be able to benefit from the tax moratorium until Dec. 31, 2029.
Not Ukraine's First Attempt To Pass Crypto Friendly Legislature
Nevertheless, this is not the first time similar bills have been submitted. The bill was announced as an alternative to another draft presented by Derevyanko’s colleague, Alexei Mushak, a member of President Petro Poroshenko’s “Solidarity” party. Bill 9083, which was introduced in September, is also aimed at amending the Ukrainian tax code to provide tax breaks for the crypto industry.
According to that scheme, profits from transactions related to cryptocurrencies and other digital assets would be subject to a preferential tax rate of 5% until the end of 2023. Starting from Jan. 1, 2024, individuals and businesses would be required to pay an 18% tax rate on their income from such deals.
Three bills dealing with key regulatory challenges have been filed in parliament since last October, but no real progress has been made toward their adoption, at least that has been reported thus far. In the absence of clear guidelines regarding taxation, a deputy finance minister recently urged Ukrainians to pay 19.5% income tax on profits from crypto transactions.