Ukrainian Tax Authority Targets P2P Transfers for Taxation, Backed by 2025 Court Rulings

Tax Demands on Peer-to-Peer Transfers Intensify

According to ХВИЛЯ: Ukraine's State Tax Service is ramping up efforts to collect taxes on large sums transferred via peer-to-peer (P2P) platforms between individuals. A growing body of court rulings in 2025 shows judges increasingly siding with the tax authorities, solidifying a new reality for taxing these informal financial transactions. Notably, unexplained transfers are now being classified as personal income, subject to an 18% personal income tax and a 1.5% military levy. This crackdown reflects a global trend of authorities seeking to regulate the digital finance space.

The National Bank of Ukraine is collecting data from commercial banks on clients with the highest P2P transaction volumes. This information is funneled to the central office of the State Tax Service, which then distributes it to regional offices. Local tax inspectors subsequently send letters requesting explanations for the source of the funds. If no response or proof is provided, an audit report is filed. Many of these audits are retrospective, with approximately 90% occurring one or two years after the transfers were made.

Recent Court Cases and Legal Exemptions from Taxation

Several court decisions from this year confirm this trend. On September 10, 2025, the Lviv District Administrative Court upheld a fine of 192,000 hryvnias for a man with an annual turnover of just under one million hryvnias. The Poltava Administrative Court, on August 7, 2025, imposed a fine of 638,000 hryvnias on a turnover of 3.5 million hryvnias. In Dnipro, a fine of 650,000 hryvnias was levied for a turnover of 2.6 million hryvnias.

It is important to note that certain legal grounds exist for exempting such transfers from taxation. These exemptions include:

• Transfers between close relatives of the first and second degree of kinship;
• Loans or repayable financial assistance, provided the funds are returned within 12 calendar months;
• The sale of a first car or motorcycle within a year, provided a sales contract exists.

Approximately 90% of audits are retrospective. This means you could be asked about your past transfers a year or two later, and you are legally obligated to document them.

- Bohdan Yankiv, Tax Law Expert

The State Tax Service's new policy could significantly impact citizens, especially those who actively use P2P transfers. The heightened scrutiny of financial operations underscores the importance of complying with tax legislation and being prepared to provide necessary documentation if audited. This development may also encourage individuals to exercise greater caution in their financial transactions to avoid potential fines and complications with the tax authorities.

As the Ukrainian Tax Authority intensifies its focus on peer-to-peer transfers, it's crucial to understand the broader implications of recent legislative changes. For instance, the government's potential move to enroll entrepreneurs as VAT payers without their consent could further complicate the tax landscape for individuals and businesses alike. To explore how these developments may affect your financial obligations, read more about this emerging tax strategy here.