Recent Poland Income Tax Regulations Amendments Require Crypto Profits To Pay 19% In Taxes

Recent Amendments To Income Tax Regulations in Poland Require Crypto Profits To Pay 19% in Taxes

The taxation of cryptocurrency profits has been a hot topic for many countries that are looking to regulate the space. One of the most recent changes has been with the government in Poland. The authorities have submitted a revised version of their former income tax regulations to President Andrzej Duda of Poland for approved. In the updated version, there are new stipulations for cryptocurrency, though these changes are not planned to go into effect until the first day of 2019.

Determining how to tax cryptocurrency-related income is one of the biggest points made, especially considering how they come after a major decision to tax any kind of digital asset, profit or loss alike. Expectedly, trying to implement the Civil Law Transactions Tax (PCC) came with incredibly angry backlash, resulting in a delay until the government was able to find something more permanent.

There are a few provisions in the draft amendments, though one of the biggest ones is in relation to the conversions between cryptocurrencies, according to Kryptowaluty. Even though there are regulations about taxing other cryptocurrency circumstances, the crypto-to-crypto transactions will not have required taxes assigned.

For other cryptocurrency assets, there will be a tax rate of 19%. This tax rate specifically applies to the exchange of a digital asset for “a payment instrument, commodity, service or property right other than virtual currency,” according to the draft. Whenever someone makes income with cryptocurrency sale, they will be treated like regular income. This flat rate will not vary between corporations and private individuals.

Next year, the residents of Poland will have to keep an accurate report that reflects every purchase that they make with cryptocurrency, which needs to go on their annual tax return. The tax return will also need to include any purchase of digital coins. There will be no option for businesses to compensate losses with the profit they make from other activity in their business. The tax return will also need to maintain a separate log of cryptocurrency costs, apart from the other costs that the business takes on.

Finally, the last regulation affecting cryptocurrencies is the sale of digital assets. In these sales, there will be a “solidarity tax,” but it will only apply for income that goes above 1 million Polish zloty, which is about $265,000 at the moment. In these scenarios, there will be another 4% tax added onto the current tax.

Even though there is a fairly in-depth approach needed for Polish residents to adhere to these new amendments, nothing is certain yet. The Polish president would still need to approve it before it goes into effect. Furthermore, by requiring traders to pay a 1% tax on every transaction, there is a chance that all digital funds could just become tax payments.

Still, this decision needs to happen soon. Suspending the Civil Law Transactions Tax will expire in about seven months, and the authorities still see the tax as being an option for implementation. Until this situation is resolved, the cryptocurrency community will have to wait with bated breath.

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