When it comes to taxes, most countries have yet to announce how cryptos should be declared. Poland is one of the only countries that managed to declare tax laws on digital currencies before the tax season deadline this year. This lack of transparency has caused record numbers of tax returns to be filled out incorrectly, but there is a good chance that most governments will let it slide this time around. That being said, Ukraine has seen the potential upswing of implementing sweeping crypto tax laws. As such, it has decided to draft new laws as soon as possible.
Government officials suggested a tax rate of five percent on individuals and legal entities operating within the crypto space or making profits from trading digital assets. They went on to add that starting from 2024 any crypto-related profits made by businesses will be taxed at a rate of 18%. These tax laws open the door to new government funding, which can help to improve the lives of millions in Ukraine.
Taxing Crypto to Help the Country
The Ukrainian government estimates that it can collect in excess of $43 million in taxes from crypto activity between 2019 and 2024. As the crypto markets grow and adoption becomes more widespread this figure could even balloon beyond these predictions. The funds collected from this taxation will then be used to upgrade infrastructure and help develop the country. While cryptos aren’t regulated in Ukraine, there is a good chance the country will wait for Europe to make a decision and be one of the first nations to implement European crypto laws.
Apps to Help with Tax Declaration
Even if your country has tax laws on crypto activity, it can still be a hassle to track down every drop of crypto you own. This is where apps like Zenledger come into the fray. Zenledger connects to virtually every exchange and digital wallet in order to track your crypto activity. It then uses this information to automatically fill out your crypto hodling declaration on your tax return. Apps like this are becoming increasingly popular, as they make a complicated process much simpler.
Sitting on the Fence
While only a handful of countries are implementing tax legislation at the moment, many are working on implementing these new laws. The potential earnings for governments through taxation is astonishing and too good to pass up. It will help shore up governments and reduce deficits. Unfortunately, due to the fact so many governments are still on the fence, many people are incorrectly declaring their crypto activity and are underpaying taxes for the year.
Ukraine is one of the first to implement these crypto tax laws, and hopefully other nations will follow suit. By implementing these laws, the air will become clear and people can start paying the correct amount of taxes owed.