If adopted by the Council of Ministers in the third quarter of this year, the cryptocurrency taxation regime may become effective commencing 2019.
The general rules of Polish progressive income scale shall apply thereto, i.e. 18% for annual income of up to 85 528 zloty (equal to EUR 20 000), and 32% for those exceeding such limit.
Decentralized Cryptocurrencies Are Told from Centralized Virtual Money
The draft defines virtual currency as a "digital representation of value", this being in line with the Act on Counteracting Money Laundering and Terrorism Financing. Virtual currencies are distinguished into cryptocurrency and centralized virtual currencies, the latter serving as a medium of exchange. Centralized virtual money may also be accepted as means of payment, stored, transferred electronically and used in e-commerce.
Crypto-To-Crypto Deals Excluded from Taxation
The bill focuses on the taxation of revenues resulting from transactions with virtual currencies. It proposes such revenues of individuals and legal entities to be reported as a part of income subject to taxation, the pertinent tax obligations to be settled annually, herewith no advance payments to be made.
Taxation rules do not cover transactions where cryptocurrency is exchanged for cryptocurrency, however, profits from trading in cryptocurrencies (in particular, on exchange platforms, over the counter deals on the free market) and sale of goods and services for cryptocurrency fall within the scope thereof. For instance, proceeds from deals where property, goods and services are traded for virtual currency shall be considered for the purposes of capital gains.
The draft bill also touches upon mining activities prescribing that the tax base for taxation purposes shall depend on the essence of miner's occupation. Thus, where mining is performed on behalf of legal entities and/or private individuals, the value of remuneration and fees obtained by miners shall be subject to taxation. In case cryptocurrency is exchanged for fiat currency before the payments to the miners' clients are made, the total amount resulting from such conversion is to be treated as revenue for tax purposes. Where they work for their own account, the tax is due on proceeds from trading in the mined cryptocurrency.