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Poland: Proposals for taxation of cryptocurrency transactions

Poland: Taxation of cryptocurrency transactions

The Ministry of Finance has proposed measures to regulate the taxation of income derived from cryptocurrency transactions.

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  • For individual income tax purposes, revenue derived from the cryptocurrency transactions would be treated as capital gains, even if a taxpayer obtains the revenue within a business activity. Thus, instead of being taxable as income at rates up to 32%, the income would be taxed at a flat tax rate of 19%. 
  • For corporate income tax purposes, income from cryptocurrency transactions also would be treated as capital gains.

Exchanges of one form of cryptocurrency for another cryptocurrency would be considered to be “tax neutral” regardless of the exchange method (i.e., on the market, in an exchange office or within an individual exchange).

The proposal includes rules for tax deductible costs in connection with the cryptocurrency trading—generally, documented expenses related solely to the purchase or sale of cryptocurrencies. The tax costs would be deductible for the tax year in which they were incurred (even if in the particular year, the taxpayer does not realize revenue from a cryptocurrency sale). The potential excess of tax deductible costs over revenues in a particular tax year would increase the tax deductible costs in the subsequent tax year.

Interim provisions

The proposal is intended to be effective 1 January 2019. However, the costs of cryptocurrency purchase incurred and not settled before 1 January 2019 may be reported by taxpayers in the first tax return submitted after 1 January 2019 (e.g., the tax return for 2018).

 

Read a September 2018 report [PDF 452 KB] prepared by the KPMG member firm in Poland

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