Ukraine's National Securities and Stock Market Commission (NSSMC) Unveiled Its Virtual Asset Taxation Matrix

Ruslan Magomedov, Chairman of the NSSMC, revealed the long-awaited regulator's proposal for crypto taxation, aiming to legalize cryptocurrencies

Ukraine’s National Securities and Stock Market Commission (NSSMC) has unveiled its virtual asset taxation matrix in a move to advance the government’s efforts to legalize cryptocurrencies in the coming months.

The Eastern European nation’s regulator has revealed its proposal for crypto taxation, aiming to offer a practical tool for taxpayers, regulators, lawmakers, and experts that allows “structuring various scenarios of taxation of virtual assets.”

“Taxation is not only a tool for filling the budget but also an important mechanism for regulating the market,” said Ruslan Magomedov, Chairman of the NSSMC.

According to the 32-page document, the main challenge for crypto taxation comes from the anonymous and decentralized nature of digital asset transactions.

“Unlike traditional income (salary, dividends), where tax obligations are fulfilled by a tax agent (for example, an employer or a bank), in the case of virtual assets, this function must most often be performed by the individual himself. This creates risks of improper declaration and administrative difficulties,” the taxation matrix reads.

The proposed tax structure introduces standard and preferential rates. The standard rate includes an 18% personal income tax on crypto earnings plus a 5% military levy, intended to support Ukraine’s defense.

Meanwhile, the preferential tax outlines 5% and 9% rates for specific crypto categories.

Crypto-to-fiat transactions are considered income and subject to tax, while crypto-to-crypto exchanges are exempt. Tokens received from staking, mining, hard forks, and airdrops “may be taxed as ordinary income or taxed only at the selling stage.”

Similarly, gifted virtual assets, donations, and wallet transfers are exempt from taxation.

According to the report by Interfax Ukraine, Magomedov detailed that the taxation matrix was an initiative of the NSSMC, which considered the experience of leading jurisdictions, such as Germany, Switzerland, Estonia, Singapore, and others, to measure “both the advantages and challenges in the taxation of virtual assets, adapting them to Ukrainian realities and the legal field.”

It’s worth noting that Ukrainian President Volodymyr Zelenskyy signed the Law Of Ukraine “On Virtual Assets” No. 1500-IX in March 2022, setting a legal framework for regulating the digital asset market.

However, by April 2025, the law has not yet been implemented, as it awaits amendments to the country’s Tax Code, which has resulted in the potential loss of millions in tax revenue.

In December, the Head of the Ukrainian Parliament Committee for Finances, Tax, and Customs Policy stated that lawmakers were working to legalize digital assets in the first half of 2025.

Nonetheless, the legislation has been delayed due to the taxation debate, with experts anticipating that the bill will be introduced in late 2025 and crypto is likely to be legalized by 2026.