The European Union is gradually unifying its approach to crypto assets, especially following the adoption of the MiCA (Markets in Crypto-Assets) framework. However, cryptocurrency taxation is still regulated individually by each country, and the rules can differ significantly.
For Ukrainians living abroad who are tax residents of an EU country, it is crucial to understand one key rule:
If you are an EU tax resident, you must declare crypto income in your country of residence.
Which Crypto Transactions Are Taxable?
In most EU countries, the following transactions are subject to taxation:
- selling cryptocurrency for fiat currency;
- exchanging one cryptocurrency for another;
- selling NFTs;
- USDT/USDC → EUR / USD;
- crypto → bank account transfers;
- receiving cryptocurrency as salary or freelance compensation;
- mining;
- staking / lending / farming / rewards;
- airdrops.
Key point:
Even if you never convert crypto into fiat, a crypto-to-crypto exchange may already qualify as a taxable event.
Two Types of Crypto Income
A. Capital gains
Example: you bought ETH for €1,000 and sold it for €2,000 → €1,000 profit.
Typical tax rate: 0–28%, depending on the country.
B. Active income
This includes crypto received as payment for work, staking rewards, or referral bonuses.
Such income is taxed as personal income, usually at rates between 20% and 48%.
How Different EU Countries Tax Cryptocurrency
Below are key examples from countries with large Ukrainian communities:
Portugal
- historically, crypto was not taxed;
- currently:
- holding period > 365 days → 0%;
- sold within one year → 28%;
- staking / mining → taxed as ordinary income.
Germany
- holding period > 12 months → 0% tax;
- holding period under one year → up to 45%;
- staking income → always taxable.
Spain
- capital gains: 19–28%;
- staking / mining: taxed as income → up to 47%.
Italy
- annual gains above €2,000 → 26%;
- gains up to €2,000 → not taxed;
- mining / staking income → 23–43%.
France
- standard capital gains tax: 30%
(12.8% tax + 17.2% social contributions).
Croatia
- holding period > 2 years → 0%;
- under 2 years → 10%;
- crypto received as payment → taxed as salary.
Can Tax Authorities See Your Crypto Transactions?
Yes — through multiple mechanisms:
- KYC requirements on exchanges like Binance, Coinbase, and Kraken;
- exchanges are required to report to regulators;
- MiCA introduces a unified transaction reporting standard;
- banks request source-of-funds explanations for large transfers;
- FATF Travel Rule enables transaction data sharing.
Most important point:
Problems arise not because you own crypto, but because you fail to declare your transactions.
Common Question: If My Crypto Just Sits There, Do I Owe Tax?
No.
Simply holding crypto is not a taxable event.
Example:
- you bought 1 BTC for €10,000;
- it is now worth €60,000.
You owe nothing — until you:
- convert it to EUR / USD;
- exchange it for another cryptocurrency;
- use it to purchase goods or services.
Crypto and Tax Residency: The Key Issue
If you:
- live in the EU,
- have a bank account there,
- rent or own housing,
- spend more than 183 days per year in the country,
then you must pay crypto taxes in your country of residence, not in Ukraine.
Ukrainian tax rules no longer apply.
How to Properly Declare Crypto in the EU
Recommendation:
Use specialised software such as:
- Accointing
- CoinTracker
- Koinly
- ZenLedger
These tools generate detailed reports covering:
- purchases;
- sales;
- exchanges;
- dates;
- exchange rates;
- profits and losses.
This allows you to file tax returns legally and with minimal risk.
Risks of Non-Declaration
- fines;
- additional tax assessments plus penalties;
- scrutiny of bank transfers;
- freezing of funds in bank accounts;
- financial monitoring;
- criminal liability in some countries.
Particularly high-risk situations include:
- withdrawing large amounts from Binance to a local bank card;
- receiving regular unexplained transfers;
- repeated crypto → fiat → crypto transactions.
Optimisation and Legal Tax Reduction
Several lawful tools exist:
- long-term holding (12+ months or 2+ years);
- relocating to a more crypto-friendly jurisdiction;
- structuring income through an LTD / LLC and receiving dividends;
- using tax losses (loss harvesting);
- personalised tax planning.
Conclusion
Cryptocurrency tax rules in the EU are becoming increasingly transparent — and increasingly strict.
The core rule is simple:
If you are an EU tax resident, your crypto income is taxed where you live — not in Ukraine and not “on the internet.”
Crypto can be used legally, safely, and without fear —
as long as you know the rules and follow them.
Before declaring — or ignoring — crypto income, it is essential to assess the tax consequences in your country of residence. An individual analysis can help avoid fines and banking issues.
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