Now in Ukraine you will have to pay taxes on the profits in cryptocurrencies

Due to the difficult economic situation that Ukraine is going through, many people have decided to use cryptocurrencies to try to preserve the value of their savings. Therefore, the last weeks have seen an exponential increase in transactions made with digital currencies within the territory.

As there is no regulation for the use of cryptocurrencies, the government had not been able to place taxes on the profits obtained thanks to them. However, that situation has just changed; from now on, the regular rate of income tax of 19.5% will be used to tax activities with digital currencies.

Although this announcement caused a stir in the population, the Deputy Minister of Finance of Ukraine, Sergey Verlanov, said that he was exaggerating with the issue of taxes, since everything was much simpler than previously thought.

"You can perform two types of operations with cryptocurrencies: mining and commerce. So, let's say we bought Bitcoin for 1,000 hryvnias; then we got lucky and amounted to 2,000 hryvnias; then we leave Bitcoin and credit the funds to a bank card. The change is 1,000 hryvnias. We impose an income tax, "said the official, according to Bitcoin News.

He also added that "the rate is 19.5%; If that's a lot or a little, it's a rhetorical question. "

For now, in Ukraine cryptocurrencies are taken as an intangible property, according to its Civil Code. However, Vernalov believes that it is vitally important that digital currencies are given legal status, creating rules specifically for them.

Meanwhile, taxpayers have two alternatives to declare their income by cryptocurrencies. Some declared them in the 'property' section, others in the 'financial assets' section. Both interpretations can be used since the cryptocurrency does not have a legal status yet, said the Vice Minister of Finance.

However, he clarified that it would not be possible to implement adequate taxes while exercising control over transactions made with digital currencies.

That governments want to make a profit from economic activities carried out within their territory is normal. However, everything becomes complicated when this activity is not regulated or legalized. In these cases, the public administration usually does two things: prohibit it or tax it according to what it interprets it adapts more in its legislation.

Although this may work in some cases, when it comes to cryptocurrencies, it would be best to create a specific regulation for them, not only to be able to place the correct taxes, but to have a certain control over the activities that are carried out with them and thus avoid that are used for illicit purposes. Always remembering to give them enough space to continue developing.