Can an individual entrepreneur on a simplified tax system sell cryptocurrency

Individual entrepreneurs (IE) on a simplified taxation system cannot sell cryptocurrency, as it is equated to the exchange of foreign currency, which is prohibited for the single tax. This was reported by the Main Department of the State Tax Service in the Chernivtsi region.

Are individual entrepreneurs on the simplified taxation system allowed to exchange currency

The simplified taxation system, regulated by Chapter 1 of Section XIV of the Tax Code of Ukraine (TCU), allows individual entrepreneurs of the second and third groups to operate under clear conditions. 

The second group is limited to 10 hired employees and an income of up to 834 minimum wages (for 2025 – about UAH 6.7 million). 

The third group has no limit on employees, but income must not exceed 1167 minimum wages (approximately UAH 9.3 million). 

However, certain types of activities are prohibited for the single tax, including the exchange of foreign currency, to which the tax authorities equate operations with cryptocurrency.

Why individual entrepreneurs cannot sell cryptocurrency

• According to p. 291.5.1 of the TCU, the activity of exchanging foreign currency is prohibited for single tax payers of groups 1–3.

• The law 'On Currency and Currency Operations' defines foreign currency as cash, funds in accounts, or electronic money in foreign units.

• Cryptocurrency in Ukraine currently lacks a clear legal status, but the tax authorities classify it as foreign currency.

When will the cryptocurrency law come into effect in Ukraine

The law 'On Virtual Assets' (№2074-IX from 2022) was supposed to regulate the circulation of cryptocurrencies, but it will only come into effect after amendments to the TCU regarding the taxation of such operations. Currently, individual entrepreneurs on the simplified system who want to trade cryptocurrency risk violating the conditions of the single tax and may be transferred to the general taxation system.

Previously, we reported that officials declared cryptocurrency worth UAH 786 million.