The Polish government has submitted amended cryptocurrency income tax regulations. It’s now awaiting approval from the President of Poland Andrzej Duda. The new updated tax framework now includes cryptocurrency related provisions. The new income tax regulations will expectedly come into effect on January 1, 2019.
What does the Cryptocurrency Income Tax Section of the Amended Framework say?
The amended income tax regulations submitted by the government of Poland says that the crypto-to-crypto transactions will not be taxed. The draft amendments (which now await Polish President’s approval) say that 19% tax rate will be applicable on digital assets only when they are exchanged for “a payment instrument, commodity, service or property right other than virtual currency”. When a person holding cryptocurrency exchanges it with another cryptocurrency, they are exempted from income tax. The draft bill says 19% cryptocurrency income tax will be applicable for both private individuals and corporate entities.
Earlier this year, the Polish government decided to tax (as per Poland’s existing Civil Law Transactions Tax) all digital money transactions, no matter whether the transactions generated profit or loss. The Polish government had to revoke their decision after widespread backlash from the crypto community. Reports say the submitted amended cryptocurrency income tax regulations have brought a sigh of relief for the crypto community.
What are the Other Important Things in the Amended Cryptocurrency Income Tax Regulations?
Reports say from next year, the residents of Poland will be needed to report all their cryptocurrency related purchases while filing their annual tax returns. In fact, the purchase of digital coins will also need to be reported. Businesses will have to differentiate cryptocurrency transaction-related costs from that of other costs. If the income of a Polish resident exceeds 1 million Polish zloty (equivalent to around US$265,000) from the sale of digital assets, it’ll attract an additional 4% “solidarity tax”. All these cryptocurrency income-related tax requirements will tentatively come into effect from January 1, 2019.
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