Poland Clarifies Crypto Taxation in New Bill

By On September 03, 2018

Poland Clarifies Crypto Taxation in New Bill

The long-awaited bill to clarify the stance of Poland towards the current taxation policy has been published by the country’s legislators.

Kryptowaluty, a Polish local media outlet explains that the document published on the country’s government site on August 24 was drawn out for consultation and review, and the Polish Council of Ministers will review it in the third quarter of 2018.

What led to the new bill?

Cryptocurrencies began 2018 on the wrong foot in Poland. Starting off the year with harsh criticism and a massive anti-crypto campaign.

The Central bank of Poland admitted to funding anti-crypto campaigns reaching up to $27,000.

Similarly, in May, Poland’s Financial Supervision Authority (KNF) organized a similar string of campaigns, with social media materials on risks associated with cryptocurrencies, pyramid schemes, and forex trading.

The Polish government authority confirmed in June that 15 financial institutions were at that time subjected to formal complaints filed by cryptocurrency group the Polish Bitcoin Association (PBS).

Cointelegraph reported in June this year that crypto owners from Poland blamed banks for deliberately denying service to cryptocurrency entities and selectively closing accounts.

The stand of Poland’s government towards cryptocurrency and related activities was mostly negative which made investors uncertain about the future of crypto-activities in the country.

The previous tax policy for crypto activities in Poland was constantly backlashed by the crypto community, hence the need for a new bill to clarify the taxation system of crypto-related activities in the country.

No tax will be charged on crypto-to-crypto transactions

Acc ording to the report, the proposal or draft is to declare revenues from virtual currency transactions as part of the taxable income of individuals and businesses.

The bill addresses the taxation of income generated from crypto related activities of both individual persons and corporate entities.

Proceeds from the sale of cryptos on exchanges, other trading platforms and in over the counter deals on the free market, and crypto mining are some of the activities that will now be taxed in the country.

According to the proposed bill, incomes from the sale of goods, services, and property for cryptocurrency will also be treated as revenues from capital gains. The only activity that will not be taxed is the exchange between cryptocurrencies.

Cryptocurrency mining tax

The bill also addressed taxes for mining operations in the country. According to the new bill, miners are expected to pay taxes on their profits. However, the tax base will be determined depending on the nature of their economic activity.

Miners who work for themselves will pay tax on the gains from the sale of the mined cryptocurrency. However, if they mine on behalf of other entities or individuals, the value of their remuneration will be taxed.

If the miner chooses to convert the cryptocurrency to fiat before reimbursing their clients, the whole amount will be considered as revenue and tax will be due on the total.

According to the published draft, taxpayers dealing in cryptocurrency will not be required to pay taxes in advance, also, all these obligations should be reported on the annual tax returns and settled once a year.

Tax nature in Poland

Income tax payment in Poland is progressive, scaled into two brackets. Individuals who earn up to 85,528 zloty (approximately $23,400) pay 18% of annual tax, while individuals who earn above this limit remit up to 32% in annual tax.

However, prev ious reports have suggested that Poland will be making changes to the current tax regime will be made next year. Miners and Cryptocurrencies traders alike would pray for a reduced tax rate.

Source: Google News Poland | Netizen 24 Poland

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