The government of Poland recently submitted amended income tax regulations for approval by President Andrzej Duda. The updated framework, which includes provisions referring to cryptocurrencies, is expected to enter into force on Jan. 1, 2019.
Also read: Growing Number of Crypto Companies Operating From Belarus
Crypto-To-Crypto Transactions
Will Not Be Taxed
The changes, long-awaited by the Polish crypto-community, address the taxation of cryptocurrency-related income. The amendments follow the temporary suspension earlier this year of a controversial decision to tax all transactions involving digital money, regardless of profit or loss. This attempt to impose the existing Civil Law Transactions Tax (PCC) has provoked angry reactions and the government has postponed the move until a permanent and comprehensive solution can be found.
There are several key provisions in the draft amendments sent to the president and one of the most important ones concerns the conversion of one cryptocurrency into another, Polish news outlet Kryptowaluty has reported. According to the amendments, such crypto-to-crypto transactions will be exempted from income tax.
However, a tax rate of 19 percent will apply when digital assets are exchanged for “a payment instrument, commodity, service or property right other than virtual currency,” the draft states. Income from the sale of cryptocurrencies for fiat money or other non-digital assets will therefore be treated just like income from capital gains and investments. The same flat rate will be valid for both corporate entities and private individuals.
Taxpayers to Report All
Cryptocurrency Purchases
Starting from next year, Polish residents will be expected to report all purchases made with cryptocurrencies on their annual tax returns, as well as all purchases of digital coins. Businesses will not be able to compensate cryptocurrency-related losses with revenues from other activities. They will also be required to separate costs related to cryptocurrency transactions from other costs.
Lastly, revenues from activities such as the sale of digital assets will be subject to the so-called “solidarity tax,” if the income exceeds 1 million Polish zloty (almost $265,000 at the time of writing). In such cases, an additional 4 percent tax rate will be applied.
Although the proposed amendments constitute a comprehensive approach to regulating the taxation of cryptocurrency income, the future of the PCC tax remains unclear. The obligation to pay the government 1 percent on all crypto transactions means traders could potentially lose all their digital funds to taxes.
The suspension of the Civil Law Transactions Tax expires on June 30, 2019, and the Polish authorities have not yet dismissed the possibility of imposing it. Until that happens, the crypto-community in the country has has little reason to celebrate.
What do you think about the new tax regulations for cryptocurrency incomes in Poland? Let us know in the comments section below.
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The post Poles to Pay 19% Tax on Income From Cryptocurrency Transactions appeared first on Bitcoin News.
