Thousands of Officials Have Declared Bitcoins: Do They Have to Pay Taxes Now?

Ukrainian officials set a new record for the amount of declared cryptocurrency. According to the Opendatabot platform, he indicated bitcoins in his electronic declarations 2,861 officials — this is 16% more than a year earlier. Against this background, a natural question arises: should the owners of crypto-assets already pay taxes, or does the legislation still leave a "gray area" for them?

The Internet portal "Comments" addressed relevant requests to the Parliamentary Committee on Finance, Tax and Customs Policy, as well as to the State Tax Service of Ukraine (SST).

Legislative status: awaiting second reading

The parliamentary committee reminded that the Verkhovna Rada supported the draft law in the first reading No. 10225-d, which should regulate the circulation of virtual assets and establish a special procedure for their taxation.

Currently, the document is being prepared for the second reading, and a specially created working group with the participation of representatives of the DPS continues to finalize its provisions.

At the same time, the Tax Service explained that There are no special rules for the taxation of cryptocurrencies in Ukraine yet. The reason is that the Law "On Virtual Assets" has not yet entered into force. It will become operational only after the adoption of a separate law that will make changes to the Tax Code regarding the taxation of transactions with crypto-assets.

Do you need to pay taxes today?

The absence of a specific law does not mean that income from cryptocurrencies is generally exempt from taxation. The Tax Service emphasizes an important distinction:

The very fact of owning bitcoins or other crypto-assets does not create a tax liability. Taxation arises precisely at the moment of receipt of income from their sale or other operations that brought profit.

If an individual (in particular, an official) received income from the sale of cryptocurrency, this income is subject to taxation under general norms of the Tax Code of Ukraine:

• Such income must be included in the annual declaration of assets and income.

• It is necessary to independently pay the personal income tax (PIT) and the military levy within the terms established by law from the profit received.

What will change in the future?

It is expected that after the final adoption of the draft law on virtual assets, the rules of the game will become much clearer. Then not only the legal status of crypto-assets, but also a special (probably more favorable or adapted) mechanism for paying taxes on such transactions will be determined.

For now, thousands of Ukrainian officials can legally declare their digital assets, and the question of their special taxation remains open until the completion of the financial reform.