Understanding NFT Taxation in Ukraine
As NFTs (Non-Fungible Tokens) gain popularity among Ukrainian creators and investors, understanding tax obligations is crucial. In Ukraine, profits from NFT sales are classified as personal income under Article 167 of the Tax Code. Whether you’re an artist selling digital art or an investor flipping NFTs, you must declare earnings exceeding UAH 248,640 annually (2024 threshold). The State Tax Service (STS) monitors crypto transactions, making compliance essential to avoid penalties.
Step-by-Step Guide to Reporting NFT Profits
- Calculate Your Annual Profit: Subtract acquisition costs (minting fees, gas, purchase price) from your total NFT sales revenue. Track all transactions using blockchain explorers or crypto tax software.
- Convert to Hryvnia: Use the National Bank of Ukraine’s official exchange rate on the transaction date for each sale.
- Complete Tax Form 1-DF: Report total annual NFT profits in Section III.1 under “Income from Independent Professional Activities.”
- File Electronically: Submit via the STS Diia Portal before May 1st of the following tax year.
- Pay Taxes Due: Transfer 18% income tax + 1.5% military duty to STS account within 10 days after filing.
Essential Documentation for NFT Tax Reporting
- Wallet transaction histories (MetaMask, Trust Wallet, etc.)
- Records of NFT minting costs and marketplace fees (OpenSea, Rarible)
- Proof of fiat conversions from exchanges like Binance
- Bank statements showing crypto-to-fiat transfers
- Dated screenshots of NBU exchange rates
Ukrainian NFT Tax Rates and Deadlines
NFT profits face a combined 19.5% tax rate:
- 18% Personal Income Tax (PIT)
- 1.5% Military Duty
No tax applies if annual income from all sources is below UAH 248,640. Key deadlines:
- May 1: Annual tax declaration deadline
- August 1: Final payment deadline for taxes owed
- Monthly: Advance payments required if previous year’s income exceeded UAH 40M
Common NFT Tax Mistakes to Avoid
- Ignoring small transactions: All sales must be reported regardless of amount
- Forgetting cost basis: Failure to deduct legitimate expenses like gas fees
- Using wrong exchange rates: Always use NBU’s daily official rates
- Missing deadlines: Late filings incur 10-50% fines + 1.2% monthly interest
- Mixing personal/business wallets: Maintain separate wallets for clearer tracking
NFT Tax FAQ: Ukraine Edition
Q: Do I pay tax if I receive NFTs as gifts?
A: Yes. Gifted NFTs are taxed at 18% based on market value when received, unless from immediate family.
Q: How are NFT staking rewards taxed?
A: Staking income is treated as miscellaneous earnings and taxed at 19.5% upon conversion to fiat.
Q: Can I deduct NFT trading losses?
A: Currently, Ukraine doesn’t allow crypto loss deductions against other income.
Q: Are foreign NFT platforms reportable?
A: Absolutely. Ukrainian residents must declare global NFT income regardless of platform location.
Q: What if I hold NFTs long-term?
A: Ukraine has no capital gains distinction. All profits are taxed as income upon sale.
Q: Do DAO earnings require declaration?
A: Yes. Income from decentralized organizations follows standard NFT tax rules.
Disclaimer: Tax regulations evolve rapidly. Consult a Ukrainian crypto tax specialist for personalized advice. Bookmark the State Tax Service portal for official updates.
