National Bank of Ukraine, together with fiscal authorities, plans to work out a joint position on the legal status of Bitcoin and its regulation

„Currentlly, the legal status of Bitcoin remains somewhat murky in Ukraine. Efforts to define this status are complicated by the lack of a consolidated approach to the Bitcoin classification and the regulation of transactions involving Bitcoin globally.” says Oleg Churiy, National Bank of Ukraine Governor in a press release.

Thus, transactions involving Bitcoin are allowed in some countries. Bitcoin is commonly treated as a commodity or an investment asset and regulated by respective law for taxation purposes. Some countries treat Bitcoin as a settlement unit.

For instance, the EU legislation defines Bitcoin as a “digital representation of value that is neither issued by a central bank or a public authority, nor necessarily attached to a fiat currency, but is accepted by natural or legal persons as a means of payment and can be transferred, stored or traded electronically”. Thus, transactions involving the conversion of a conventional currency into Bitcoin are not subject to VAT.

In Israel, Bitcoin is not defined as currency and it is treated neither as financial security nor as an asset subject to tax. Whenever Bitcoin is sold, the seller has to pay a tax on capital gains.

The People’s Bank of China treats Bitcoin as a virtual commodity, not a currency. Therefore, transactions involving the sale of Bitcoin are subject to VAT.

In Japan, Bitcoin is defined as “asset-like-value”, with transactions involving the sale of Bitcoin being subject to VAT.

In Australia Bitcoin is viewed as property, while transactions involving Bitcoin are treated as barter transactions.

Canadian laws and regulations define Bitcoin as an “intangible asset”, while transactions involving Bitcoin are treated as barter transactions.

„Therefore, there is a lack of global consensus on the definition of Bitcoin. It is defined differently in different countries, where it is treated as a virtual currency, monetary substitute, intangible value, virtual commodity, etc. In its turn, the National Bank of Ukraine does support any of these definitions.”, the governor concludes.

The NBU official said that in order to work out a joint position on the legal status of Bitcoin and its regulation, „the NBU has engaged in a dialogue with the Ministry of Finance of Ukraine, the State Fiscal Service, the State Financial Monitoring Service, the National Securities and Stock Market Commission and the National Commission for the State Regulation of Financial Services Markets”.

This issue will be addressed at the next meeting of the Financial Stability Council , which has been scheduled for late August 2017.