Financial regulators in Ukraine have published new guidance classifying cryptocurrency as an intangible asset, in a move that will impact on how cryptocurrencies are regulated and taxed in the country.
The Ukrainian National Agency for the Prevention of Corruption (NAPC) offered the definition as part of its updated view on cryptocurrency regulation, according to local media reports, Forklog reported.
The move is designed to keep in line with the guidelines published by the Financial Action Task Force (FATF), the international body tasked with tackling money laundering and other financial crimes.
The change was made ahead of the income tax deadline in Ukraine, with millions of taxpayers expected to file returns by the end of April which could be affected by the changes in the rules.
As part of the changes, Ukrainian taxpayers will also be required to disclose all crypto holdings they own to the tax authorities, as well as details of the assets held by their families, in keeping with the treatment of other types of digital assets.
The document must include the name of the asset, the date of the last cryptocurrency purchase by the declaring entity, the number and total cost of a certain type of cryptocurrency tokens belonging to the declaring subject or a member of his family as of the last day of the reporting period.
The guidance also determines how crypto should be valued, with reference to the value in Ukrainian fiat at the exchange rate set by the National Bank of Ukraine.
The move from Ukrainian regulators echoes similar steps taken recently in Germany, where regulator BaFin announced it was now considering cryptocurrencies a type of financial instrument. The German regulator also referenced FATF guidance in reaching its conclusion about the status of cryptocurrency.
Definitions of cryptocurrency is becoming an increasingly prominent issue for regulators, as international bodies increasingly push for a standardized approach to managing the risks of digital assets.
In addition to its influence on the tax treatment of crypto, definitions also clarify the appropriate regulator and legal framework for managing cryptocurrencies, reducing uncertainty for those using digital assets.
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