Ukraine Classifies Crypto As Intangible Asset

Ukraine’s National Agency for the Prevention of Corruption, or NAPC, has issued guidance recently. This guidance has defined digital currencies as a type of intangible asset.

The Tax Man Cometh

Originally reported through the Forklog media outlet, the Ukrainian agency has defined it in accordance with the Financial Action Task Force (FATF) ’s views on cryptocurrencies as a whole.

This comes just before the country’s tax season kicks into gear, as its citizens and companies are mandated to submit their various income declarations before the 30th of April, 2020.

Intangible Assets Need To Be Clarified

The report clarified certain matters regarding crypto as well. Ukrainian nationals are mandated to declare their respective holdings in the crypto sector, as well as the assets of their various family members. This runs alongside similar laws within the country regarding other intangible assets.

The guidance explained that the documents that they must submit must also include the name of the asset, as well as the date of the last cryptocurrency purchase.  The declaration must also stipulate the total cost and number of the various kinds of cryptocurrency tokens that the subject owns, or the family member owns. These declarations must be accurate to the last day of the reporting period of said declaration.

Following FATF and Germany’s Example

Ukraine’s new guidance when it comes to cryptocurrencies falls alongside similar classifications that Germany’s regulator, the Federal Financial Supervisory Authority, or BaFin, had made. Under German law, cryptocurrencies are classified as financial instruments, as opposed to Ukraine’s intangible assets.

Ukraine’s government had decided to adopt the guidelines the FATF had published in a bit to tackle terror financing and money laundering threats within its borders. They did this with the introduction of the bill last year, the bill itself having been passed back in December of last year.

Past Concerns

In an amusing, endearing twist of fate, both citizens and businesses within Ukraine had already been busy declaring their digital asset holdings to the tax department for years. Now, the rest who didn’t think it’s needed, are now mandated to do so.

At the same time, illegal activities through the use of cryptocurrencies have been rampant within the Eastern European country. Back in August of last year, authorities in Ukraine had managed to cease a large amount of crypto mining hardware that was set up within a state-owned nuclear power plant.

As the world slowly moves towards crypto integration, tighter regulations and less criminal activities will come along with it.