Ukrainian Taxpayers Will Now Have to Report Crypto Holdings

Ukraine’s revenue agency has published guidance for taxpayers to report their cryptocurrency holdings.

According to the new document, first reported by Russian-language crypto news outlet Forklog, taxpayers should report digital assets as intangible property, similar to intellectual property or licenses for natural resources extraction.

The guidance indicates cryptocurrencies, according to the Financial Action Task Force's (FATF) definition, are a digital unit of value, which can be traded electronically and transferred, and used as a means of payment or investment.

To report cryptocurrency holdings, taxpayers should name the assets they hold (such as bitcoin BTC$92,404.59, ether ETH$3,246.87, XRP, etc.) as well as the date of acquisition, the amount owned on the last day of the tax period, and the value of the holdings in Ukraine’s national currency (the hryvnia) according to the exchange rate on the last day of the tax period.

Ukraine has recently made a series of moves aimed at clarifying the rules around cryptocurrency. In February, the country’s Ministry of Digital Transformation made the surprisingly tech-savvy announcement that it was not planning to regulate cryptocurrency mining since it’s already governed by the rules of the blockchain protocol.

Ukraine's financial watchdog earlier indicated [crypto service providers would be obliged to monitor all crypto transactions above $1,200 and report suspicious activities to the authorities. And a bill yet to be passed by Ukraine’s parliament proposes crypto-related earnings be taxed at a 5 percent rate for the first five years after passage.

Yet, the country has still to come up with a comprehensive set of regulations for the crypto industry, and the new income reporting rules might be the first action with a real impact on Ukrainian taxpayers.

Even though declaring crypto holdings hasn’t been obligatory until now, some Ukrainian politicians have already disclosed some impressive numbers from their crypto wallets.

In 2016, member of parliament Dmitri Golubov reported holding 4,376 BTC and Odessa city council member Anatoly Urbansky declared 256 BTC. In 2019, governor of the Odessa region Maksim Kutsy disclosed 290 ВТС and 11,071 ETH, Forklog writes.