Comparative Characteristics of the Legal Framework for Taxation of Virtual Assets in Ukraine: Towards Their Legalization and Legislative Prospects

The rapid evolution of financial digital technologies promises to offer consumers greater access to quality services, but it also increases the demands on state regulators: who, on the one hand, want to facilitate this progress, and on the other hand, pay attention to the fiscal component of such aspirations. The purpose of the study is to analyze the existing system of taxation of virtual assets (cryptocurrencies); and, on the other hand, the prospective system of their taxation, which is already laid down in existing draft laws and is planned (with the implementation of the MiCA Regulation) in future amendments to the Tax Code of Ukraine. The research was based on the analysis of the Ukrainian legal framework, court practice and official consultations of the tax regulator. Until the entry into force of Law 2074-IX together with the amendments to the Tax Code, the latter does not provide for a special taxation procedure for virtual assets (cryptocurrencies), so income from transactions with them should be taxed under the general rules. The prospective procedure for taxation of virtual assets, if Law 2074-IX comes into force together with Draft Law 7150, highlights the following: individuals, individual entrepreneurs and legal entities will pay income tax on transactions with virtual assets at a rate of 5%. The author compares the current system of taxation of virtual assets (cryptocurrencies) and the prospective system provided for in Draft Law 7150. With regard to the prospective system, in addition to a clear reduction in the tax rate on income from transactions with virtual assets, the study outlines a number of its features, advantages and disadvantages. The author identifies areas for improving the system of taxation of virtual assets in Ukraine, which should cover the most common transactions with them: sale of virtual assets for money; payment for goods and services with virtual assets; exchange of virtual assets for each other; creation of virtual assets (mining); growth of market value, etc.

cryptocurrency, Bitcoin, token, digital money, electronic money, non-cash money, money surrogateб FinTech