New draft law on cryptocurrencies in Ukraine: some types of advertising will be banned and consumers will be protected

The Chairman of the Tax Committee of the Verkhovna Rada, Danylo Hetmantsev, registered a draft law No. 10225-d. The document proposes to amend the Tax Code and the law «On Advertising», as well as other legislative acts, in order to regulate the circulation of virtual assets (cryptocurrencies).

For example, it is proposed to ban certain types of advertising, and in case of violation of the rules, fines will be imposed: from 5,000 to 10,000 tax-free minimum incomes for each case (up to UAH 170,000). Also, until December 31, 2027, fines may be imposed in the amount of 300% to 600% of the cost of the placed advertisement. The advertising restrictions will apply not only to the cryptocurrency itself, but also to software or hardware and software systems.

It is proposed to ban it:

• claim that virtual assets are a means of payment or exchange in Ukraine;

• identify virtual assets with electronic or digital money (except for electronic money tokens);

• conduct payment transactions for goods through virtual assets;

• make forecasts of changes in the value of virtual assets.

Token advertising will also have to contain information on the availability of an issuer’s authorization or banking license, depending on the type of token.

They will also ban it:

• advertising virtual assets without appropriate authorization;

• advertising using false or ambiguous statements;

• promotion of pyramid schemes under the guise of transactions with virtual assets.

In case of termination or prohibition of a public offering of virtual assets, issuers must stop advertising them within three business days. At the request of the regulator, advertising must also be suspended or prohibited within three days.

Meanwhile, the draft law on virtual assets passed Committee and recommended for consideration in the first reading. It defines the concept of virtual assets, which are divided into three categories:

1. Asset-linked tokens – their value is stabilized by pegging them to assets such as currency or property;
2. e-money tokens are pegged to one official currency;
3. other virtual assets – a category that covers assets that do not belong to the first two types.

Ownership of virtual assets is acquired through an issue, transaction, law, or court decision and is confirmed by the possession of access means, such as cryptographic keys. The law provides for a presumption of legitimate ownership, unless a court determines otherwise.

• a public offering of virtual assets requires a «white paper» – a document with detailed information about the asset, the issuer, and the risks. Admission to trading on trading platforms is also governed by clear procedures, including authorization and disclosure.
• The white paper is a mandatory document for a public offering that must be truthful, clear and not misleading. Marketing communications must be consistent with this information, contain risk warnings and not be distributed before the white paper is published.
• Providers of services related to the turnover of virtual assets (storage, trading, transfer, etc.) must be authorized, meet organizational and financial requirements, and ensure customer protection.
• protecting asset owners and clients through transparency, disclosure and measures against insider trading, market manipulation and illegal disclosure of information.
• the issue of taxation is determined.

It is proposed for the personal income tax:

• tax income from transactions with virtual assets separately (from other income and other investment income);
• to tax the profit from transactions with virtual assets earned during the year as the difference between the income from the sale and the cost of acquiring virtual assets during the year;
• an individual has to declare income and pay taxes himself;
• not to tax: a) income from transactions on the exchange of virtual assets for other virtual assets, as well as income from the sale of virtual assets within one minimum wage; b) the value of virtual assets received as a result of their issue (creation) or free transfer from their issuers or offerors and/or received exclusively in exchange for personal data of an individual; losses incurred in previous periods (if sold cheaper than bought – this is a risky market) should be taken into account until they are repaid (with some exceptions); for virtual assets acquired before the entry into force of this law, if they are sold during 2026, individuals will have the right to choose a preferential personal income tax rate of 5%;

Regarding corporate income tax:

• new differences are introduced to adjust the financial result (similar to the way securities transactions are taxed);
• the list of expenses to be taken into account in transactions with virtual assets will be determined by the Ministry of Finance upon the regulator’s submission.

Regarding value added tax (VAT):

• are not subject to VAT: transactions on the issue (emission), placement in any form of management, sale, exchange, redemption of virtual assets, except for: a) sale and exchange of NFTs; b) sale and exchange of virtual assets certifying the right to demand the transfer of property or provision of services; services of service providers related to the turnover of virtual assets (except for consulting services, which are taxed on a general basis).

Regarding the simplified taxation system:

• single tax payers are prohibited from transactions with virtual assets;
• providers of services related to the turnover of virtual assets are not entitled to use the simplified taxation system.

In terms of administration:

• providers of services related to the turnover of virtual assets that provide services to residents of Ukraine are required to register with the controlling authorities and submit an annual report on transactions with virtual assets in respect of individuals and legal entities that are residents of Ukraine (this is a step towards the gradual introduction of CARF and the implementation of the DAC8 Directive);
• Failure to fulfill these obligations will result in fines for service providers related to the turnover of virtual assets, which will be applied in reduced amounts during the transition period (in 2026 – 10% of the established fine, in 2027-2029 – 25% of the established fine).

The above amendments to the Tax Code are expected to come into effect on January 1, 2026.

Source: Sud.ua