Poland Starts Its Crypto Tax Experiment
Local observers say Poland’s crypto industry is looking cautiously to the new regulations which will require cryptocurrency traders to declare their revenues from the sale of cryptocurrencies in 2019 and subject them to a tax rate of 19%.
Starting this year, the tax authorities will treat cryptocurrency trades similarly to revenues from the stock market. However, in some cases, the tax rate is lower for crypto investors.
“In practice, this means that the [applicable] tax rate will be lowered from 32% to 19% for those investors whose revenues will exceed the first tax threshold (PLN 85,528),” according to Marcelina Szwed-Ziemichód, a tax advisor from tax advisory firm MSZTax.
This means that the effective tax rate on revenues from the sale of cryptocurrency will be kept at the rate of the first threshold, which is set at 19%, also for those traders whose revenues exceed EUR 19,911 in one year.
However, some market players thought that imposing a personal income tax on revenues from the sale of cryptocurrencies is not realistic.
“But in five years, because the tax authorities have so much time before tax liabilities expire, it will become rather obvious that tax offices obtain information from cryptocurrency exchanges, including those abroad,” prof. Krzysztof Piech, the Director of the Blockchain Technology Centre at Lazarski University in Warsaw, tells Cryptonews.com. “What we don’t have is any research on the scale of taxation of profits from the sale of cryptocurrencies. It would be very interesting to observe how this phenomenon changes.”
According to Piech, the tax authorities will most likely continue to increase their capability to track cryptocurrency transactions by Polish taxpayers.
“Nothing is lost on the blockchain, and a transaction that once becomes recorded on it will stay there for years. This allows to invigilate the society, its financial flows, in a more efficient way than in the traditional banking system,” Piech said. “Even if the tax authorities currently don’t have sufficient software to track transactions and analyse big data, then in a few years they surely will.”
The Finance Ministry of the country with a population of around 40 million admits that they don’t know how many persons trade crypto in Poland now.
Another major regulatory development will come in July in relation to the controversial 1% tax on civil law transactions (PCC) by cryptocurrency traders. The ministry’s regulation from 12 July temporarily suspended the tax’s collection between 13 July 2018 and 30 June 2019. This said, the Finance Ministry says it is analysing other, “more appropriate forms of taxing cryptocurrencies”.
Weekly LocalBitcoins, a peer-to-peer bitcoin marketplace, volume (in bitcoin) in Poland:
Total number of Bitcoin ATMs / Tellers in Poland: 28