The world is changing faster than we can get used to it. What seemed like a “novelty for the select few” just a few years ago is now gradually becoming part of our everyday lives. A striking example of this is digital financial instruments and cryptocurrency. For some, they are associated with risk and uncertainty, while for others they are an opportunity to invest, earn money, and create new businesses. Regardless of one’s attitude, one thing is clear: these processes cannot be left outside the legal framework.
When something new and unusual appears, society is faced with the question: how can it be regulated so that it is convenient for users, the state has clear rules, and businesses receive guarantees of stability? After all, cryptocurrency is not just “virtual money,” but a whole new layer of the economy that requires clear mechanisms for protection and functioning.
That is why it is so important for the state to develop modern approaches to regulating new phenomena. Legislative initiatives in this area are a step towards transparency, confidence, and trust. And although the discussion is ongoing, we can already say that the emergence of such rules is a signal that digital assets are gradually ceasing to be a “gray area” and becoming part of the official economy.
New cryptocurrency law
Ukraine has taken an important step toward regulating the virtual asset market, which until now has operated under “Wild West” rules. After several years of discussions and work by a special working group of MPs, the draft law on virtual assets passed committee and was adopted in its first reading in early September 2025.
According to the explanation, this document proposes clear rules for the crypto asset market, emphasizing transparency, investor protection, and, in particular, taxation. According to the plans, the amendments to the Tax Code will come into force on January 1, 2026, but preparations for the implementation of these rules will begin on September 1, 2025, making this topic relevant for all market participants.
Virtual assets (crypto assets) are a special type of digital object (property) that exists in electronic form thanks to distributed ledger technology, such as blockchain. It is important to emphasize that virtual assets are not money and cannot be used as an official means of 
payment in Ukraine. Their legal status is similar to movable property from the point of view of civil law. However, electronic money tokens are identified with electronic money in accordance with the Law of Ukraine “On Payment Services.” This creates a basis for taxation, which was previously a problematic aspect, due to which the previous law on virtual assets never fully came into effect.
Legalizing cryptocurrency could have a significant impact on the state budget. According to the study, if the market had been regulated earlier, Ukraine could have received approximately UAH 8.34 billion in taxes from registered crypto exchanges for 2021-2024 (at a rate of 18%) and up to UAH 6.53 billion from taxation of citizens’ income. The new approach to taxation does not simply introduce taxes, but makes them fair: not all income is taxed, but only profits from transactions.
Classification of virtual assets: Basis for taxation
The bill divides virtual assets into three main categories, which directly affects their taxation and regulation:
- Asset-backed tokens: Their value is stabilized by pegging them to real assets such as currency or property. This includes stablecoins, where stability is ensured by reserves.
- Electronic money tokens: These assets are pegged to a single official currency, such as the hryvnia or the dollar. They function similarly to electronic money and are subject to special rules.
- Other virtual assets: This category covers everything that does not fall into the first two, such as most cryptocurrencies like Bitcoin or Ethereum. The regulator (e.g., the National Bank or the Securities Commission) will determine which assets belong here.
Ownership of virtual assets is acquired through issuance, transaction, law, or court decision and is confirmed by possession of cryptographic keys. There is a presumption of lawful ownership unless a court determines otherwise. For a public offering of virtual assets, a “white paper” is required—a detailed document with information about the asset, the issuer, and the risks. Marketing must be truthful, with risk warnings, and may not be distributed until the white paper is published.
Service providers (storage, trading, transfer of virtual assets) must be authorized, meet organizational and financial requirements, and ensure customer protection. This includes measures against insider trading, market manipulation, and illegal disclosure of information.
Personal income tax: Profit, not income
One of the key innovations is personal income tax (hereinafter – PIT). Previously, cryptocurrency transactions were taxed as ordinary income at the general rate, which made the market less attractive. From January 1, 2026, separate taxation will be introduced specifically for profits from transactions with virtual assets, calculated as the difference between income from sales and acquisition costs during the year.
- Self-declaration: Individuals are required to declare their income and pay taxes independently.
- Non-taxable transactions:
- Exchange of virtual assets for other virtual assets.
- Sale of virtual assets within the limits of one minimum wage.
- Value of virtual assets received through issuance, free transfer from issuers, or in exchange for personal data.
- Loss recognition: Losses from previous periods (when virtual assets were sold for less than they were purchased) can be recognized until fully amortized, with some exceptions.
- Preferential rate for old assets: For virtual assets acquired before the law came into force, a preferential personal income tax rate of 5% applies when sold during 2026. This allows old assets to be “brought into the open” at a reduced rate, which is a fair approach to the transition period.
Corporate income tax: Adjustment of financial results
For legal entities, new differences are introduced to adjust the financial result before taxation, similar to securities transactions. The list of expenses taken into account in transactions with virtual assets will be determined by the Ministry of Finance upon the recommendation of the regulator. This ensures transparency and adaptation to the specifics of the market, allowing businesses to optimize their tax burden without evasion.
Value added tax: Tax exemption
A significant portion of virtual asset transactions are exempt from VAT, which facilitates trade.
The following are not taxed:
- Issuance (emission), placement, sale, exchange, redemption of virtual assets (except for NFTs and virtual assets that certify the right to property or services).
- Services of suppliers related to the circulation of virtual assets (except for consulting services, which are taxed on general grounds).
Regarding the simplified taxation system, single tax payers are prohibited from conducting transactions with virtual assets. Service providers involved in the circulation of virtual assets cannot use the simplified system. This is aimed at ensuring full control and transparency in a sector where risks are high.
Administration and penalties
Service providers working with Ukrainian residents are required to register with the regulatory authorities and submit an annual report on transactions with virtual assets. This is a step towards the implementation of CARF (Crypto-Asset Reporting Framework) and the EU’s DAC8 directive, which strengthens international cooperation in taxation.
Penalties are provided for non-compliance, but with a transition period:
In 2026 – 10% of the full amount of the penalty.
In 2027-2029 – 25% of the full amount.
This allows time for adaptation, making the implementation smoother.
Deputy Yaroslav Zheleznyak announced that taxes on income from cryptocurrencies will be general and will amount to 23% of profits (personal income tax and military tax). “General taxes will be (18+5%) of profits, and the first year will have a preferential rate of 5% on fiat currency withdrawals in the first year.”
The new law on virtual assets, with an emphasis on taxation from January 1, 2026, establishes clear rules for the cryptocurrency market in Ukraine. Instead of taxing all income, the focus on profits makes the system fair, given the volatility of the market. Concessions for old assets and VAT exemptions encourage legalization, potentially bringing billions of hryvnia to the budget.
