Ukraine to adopt Europe’s MiCA regulation around digital assets and cryptocurrency
Ukraine intends to implement the European Parliament’s Markets in Crypto Assets (MiCA) package into their national legislation. The package introduces licensing for crypto service providers and mechanisms for investor protection.
Ukraine has announced its intention to adopt the crypto regulations approved by the European Parliament in order to become a regional leader in crypto adoption. The government is already moving in that direction, and the State Tax Service of Ukraine has issued a clarification regarding the taxation of income from cryptocurrency transactions.
Ukraine’s lawmakers first adopted a draft law “On Virtual Assets” in September 2021, which was then revised in accordance with President Volodymyr Zelenskyy’s recommendations and passed again in February 2022, before he signed it into law. The Lviv Office of the State Tax Service of Ukraine has taken the matter of taxation of crypto-related income for private individuals into its own hands, clarifying that income received from the sale of cryptocurrencies is included in the total annual taxable income.
Ukraine should incorporate the EU crypto regulations into its national law, as well as introduce crypto tax rules, in order to become a candidate for EU membership.
The MiCA package was approved by the European Parliament in April 2022 and is the first comprehensive attempt to regulate the crypto space. The package also introduces a licensing regime for crypto service providers and investor protection mechanisms. Ukraine’s national legislation is expected to be in line with the MiCA package by the end of 2022.