CRYPTOCURRENCY FOR FOP: SETTLEMENTS, TAXES, OPERATIONS 2023

On February 17, 2022, the Law “On Virtual Assets” was adopted, which ensured the growth of the Ukrainian segment of the cryptocurrency market. So, let's look at what prospects the virtual currency has received in Ukraine.

What has changed with the adoption of the law

Among the key positions that were fixed are:

• A 5 percent tax rate on investment income that an entrepreneur receives from crypto-currency assets.
• Virtual assets are defined by an intangible good, the nature of which is identical to the nature of a literary work.
• Such assets are not considered means of payment. Therefore, they cannot exchange services or property.
• As for the ownership of a virtual asset, it is confirmed by the possession of a special virtual key. Such a key is a combination of various technical means.

An important issue is the regulatory policy in the issue of cryptocurrency circulation.

How the state regulates the sphere

The definition of a regulatory body for a specific type of cryptocurrency transactions depends on what type of cryptocurrency it is. And here one should resort to the terminology regarding the fact that such virtual currencies can be secured and unsecured. With regard to a secured asset, it gives the right to claim the object of collateral, determined by the transaction, on the basis of which such an asset was created.

So, in relation to the regulatory bodies, they are as follows:

• If the cryptocurrency is equipped with fiat currency or banking metals, its circulation is controlled by the National Bank of Ukraine.
• If the cryptocurrency is backed by securities, then the National Securities and Stock Market Commission has the authority of the regulator.

Thus, the state took care to distribute the functions and powers of regulators among the relevant departments.

Types of operations with virtual assets

Among the most common operations and services:

• administration or storage;
• retelling;
• exchange;
• intermediary services.

As for the market participants of such assets, they are service providers and other entities that perform the listed operations with cryptocurrency. Each type of service provides for obtaining a special permit, provided for an officially established fee. If we are talking about residents of Ukraine, then this fee starts from 68 thousand hryvnia and can reach 136 thousand hryvnia. When it comes to non-residents, here the amounts increase. We are talking about the cost of permission from 340 thousand hryvnia and up to 680 thousand hryvnia.

What has changed with the adoption of the law

Previously, the sphere of relations with the use of cryptocurrency was out of legal regulation. Such a currency was considered neither money, nor electronic money, nor a means of payment. With regard to regulation today, its main aspects should be called:

• the existence of a definition of a virtual asset in the Law of Ukraine "On Preventing and Combating the Legalization (Laundering) of Income";
• the possibility to seize such assets in accordance with Art. 170 Code of Criminal Procedure;
• criminal liability of civil servants for the illegal acquisition of cryptocurrency assets;
• requirement to declare cryptocurrency assets.

Important aspects of taxation

The regulation of this sphere is not easy, and the legislation is still at the stage of transformation. In order not to miss important aspects for yourself, it is better to use the help of qualified lawyers. It is these experts who work as part of the law firm. If we are talking about the basic aspects of regulation, they are as follows:

• FLP on the general taxation system reports for operations with cryptocurrency according to the same rules as other individuals.
• If we talk about single tax payers, the legislators propose to allow transactions related to virtual assets under a simplified system.
• With regard to income from the sale of virtual assets, the current legislation obliges them to be reflected in the declaration with the subsequent payment of a 5% tax (excluding the costs of acquiring such assets).

The crypto-currency segment of the market is developing rapidly, and the state is making attempts to regulate it more actively. Legislation is constantly changing. To be aware of what is necessary for yourself, it is worth enlisting the support of a good lawyer.