Ukraine Not Pleased With Public Officials Failing In Making Full Disclosure of Their Virtual Currencies Ownership

Ukrainian tax authorities have been submitted with the annual returns filing from the officials holding public offices, however, does not find the returns having been submitted by the public officials responsibly as the virtual currency ownership disclosures made are found to be doubtful and raise questions. Some of the filers could not even prove the source of acquiring virtual assets because the account transactions do not tally.

The Government of Ukraine had previously introduced a tax law amendment which was in reference to the virtual currencies and assets. Crypto trading and mining are both legalized activities under the laws of Ukraine. This gave Ukrainian Government the thought to levy and collect tax upon crypto transactions. For this purpose, the Government intended to receive full disclosure of their ownership of virtual currencies and/or assets. A legislation in this regard was approved and implemented by the Government. In good faith, the Government said that the first party to fulfil this obligation of making full disclosure, should be the Government and its officials themselves. It was proposed that the due annual filing by the Government officials will contain crypto ownership disclosures for the purposes of tax collection.

After implementing the law, Ukrainian Government was hopeful that government officials would not mind making such disclosures. However, it turned out that most of the public officials are finding ways how they can avoid the law. Annual filings have recently been filed by the government officials, however, the tax authority is not pleased with their filings. Certain lacunas and ambiguities have been pointed out in the filings, particularly with regard to virtual currency disclosure perspective. Tax authority is of the view that the officials have not acted responsibility and have deliberately not made full disclosures.

The authority noticed that wrong information has been submitted in the annual filings. The public officials have even failed to describe the source of income or provide the source of their crypto ownerships.

For instance, the authority noticed that a public official named Dmitry Gurin had lost his Bitcoin holding in a robbery. Gurin, who is in fact a lawmaker, declares that he lost 40 units of Bitcoin which were stolen from his car by thieves. According to Gurin, he had kept the stolen Bitcoins in a hardware wallet which was lying in his stolen vehicle. However, in the statement of the dependents, i.e. Gurin’s wife suggested that his wife owned and possessed 42 Bitcoins. Yet no credible evidence or source of his wife’s Bitcoin ownership was submitted before the authority. Instead, the documents submitted fail to establish the connection between Bitcoin purchase and the source of purchase. This raises questions and doubts in the mind of the Ukrainian national tax authority.

Gurin, on the other hand, tendered an oral explanation to the Bitcoin ownership and said that his car was stolen in April this year. He even said that the matter is under enquiry by the respective police station.

However, Gurin is just one example. There is in fact a whole list of public officials whose crypto ownership disclosure has been questioned by national tax authority.

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