Cryptocurrencies did not have a good beginning to 2018 in Poland as the year started off with a massive anti-crypto campaign and harsh criticism. Now, the Poland government takes the much-awaited stance towards the current taxation policy to be added in the country’s legislators.
According to Kryptowaluty, a Polish local media outlet, on August 24, the country’s government site published a document, that was drawn out for consultation and review, and the Polish Council of Ministers will review it in the third quarter of 2018.
The funding for anti-crypto campaigns reached up to $27,000, as admitted by the Central bank of Poland. In May, Poland’s Financial Supervision Authority (KNF) launched a similar campaign regarding the risks associated with cryptocurrencies, pyramid schemes, and forex trading by picking data from social media.
In June, The Polish government authority confirmed that at the time, the cryptocurrency group, Polish Bitcoin Association (PBS) filed formal complaints against 15 financial institutions. In June itself another report by Cointelegraph mentioned that crypto owners from Poland allegedly blamed the country’s banks for denying service to cryptocurrency entities and selectively closing accounts.
As illustrated above, Poland’s government have had been highly negative towards cryptocurrency, which made the crypto-activities in the country difficult and the investors became uncertain. After a constant backlash over the previous tax policy for crypto activities in Poland, the government needed a new bill that will clarify the taxation system of crypto-related activities in the country.
According to the report, the draft is to declare revenues from virtual currency transactions as part of the taxable income of individuals and businesses. Furthermore, the bill lays down the guidelines for the taxation of income generated from crypto related activities for both individual persons and corporate entities.
As per the proposed bill, some of the crypto activities that will be taxed in the country are crypto mining, over the counter deals on the free market, and proceeds from the sale of cryptos on exchanges, other trading platforms. The 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
According to the new bill, miners are liable to pay tax according to the nature of their economic activity. Miners who work for themselves will pay tax on the gains from the sale of the mined cryptocurrency. In case they mine on behalf of other entities or individuals, the value of their remuneration will be taxed.
If cryptocurrency is converted to fiat before reimbursing the clients, the whole amount will be considered as revenue and tax will levy on the total. The published draft also states that 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.
Poland’s Income tax payment is scaled into two brackets. An 18% annual tax levied on individuals who earn up to 85,528 zloty (approximately $23,400), while 32% in annual tax will be paid by individuals who earn above this limit.
However, previous reports suggest that the current tax regime will go under changes effective from next year. Miners and Cryptocurrencies would be hoping the tide turns in their favor and not against them.