How to Report Crypto Income in Ukraine: Complete 2024 Tax Guide

Understanding Crypto Taxation in Ukraine

Since Ukraine’s Virtual Assets Law came into effect in 2022, cryptocurrency transactions are fully regulated. The State Tax Service of Ukraine (STS) treats crypto as intangible property subject to taxation. Both residents and non-residents earning income from Ukrainian-sourced crypto activities must declare earnings. Failure to comply can result in penalties of 5-25% of unpaid taxes plus fines.

What Counts as Taxable Crypto Income?

You must report:

• Trading profits (selling crypto for fiat or other cryptocurrencies)
• Mining rewards (block validation income)
• Staking/yield farming returns
• Airdrops and hard forks (free token distributions)
• Crypto payments for goods/services
• P2P exchange profits

Note: Only profits are taxed, not the principal investment. Losses can offset gains.

Step-by-Step Guide to Reporting Crypto Income

1. Calculate Annual Gains: Subtract purchase costs from disposal value using FIFO (First-In-First-Out) method. Track all transactions in UAH using exchange rates from the National Bank of Ukraine at transaction time.
2. Prepare Documentation: Gather exchange statements, wallet addresses, and records of mining/staking activities.
3. Complete Tax Form: File Declaration D1 via the STS e-cabinet or at local tax offices by May 1st following the tax year.
4. Pay Taxes: Transfer 18% Personal Income Tax + 1.5% Military Levy on net profits by August 1st.

Common Reporting Mistakes to Avoid

• Ignoring small transactions (all activity must be reported)
• Using incorrect exchange rates for valuation
• Mixing personal and business crypto wallets
• Forgetting to report mining expenses (electricity/hardware costs)
• Missing the May 1st declaration deadline

Penalties for Non-Compliance

Late or inaccurate filings trigger:

• 5% fine on unpaid taxes for unintentional errors
• 25% penalty for deliberate tax evasion
• Accrued interest on overdue payments
• Criminal liability for violations exceeding UAH 1.09 million

Voluntary disclosure before audit reduces penalties by 70%.

FAQs: Crypto Taxes in Ukraine

Do I pay tax if I only hold crypto?

No. Taxation applies only when you dispose of crypto or earn rewards (mining/staking). Long-term holding isn’t taxed.

How are losses handled?

Net annual losses can be carried forward for 5 years to offset future crypto gains. They can’t reduce other income types.

Are foreign exchanges reportable?

Yes. Ukrainian residents must declare worldwide crypto income regardless of exchange location.

Is Binance P2P trading taxable?

Yes. Profits from peer-to-peer transactions are subject to standard 19.5% tax rates.

Can I deduct hardware costs for mining?

Yes. Miners can offset income with verifiable expenses like ASIC rigs and electricity bills.

Pro Tip: Use crypto tax software like Keeper or consult a Ukrainian tax advisor specializing in virtual assets to automate calculations and ensure compliance with evolving regulations.