Poland Rolls Back Tax on Crypto Transactions

The Polish government plans "in-depth analysis" before further introducing crypto taxation.

by Marin Marinov
22 May • 3 min
In Regulation

The Polish Ministry of Finance has backed down on the newly introduced cryptocurrency tax that charges every virtual coin transaction, regardless if it generates any profit, the Deputy Finance Minister told local media. The government plans to “temporary abandon” the rules and make an "in-depth analysis" before any new regulation.

“The Ministry of Finance has accepted the irrational effect of the [Civil Law Transactions Tax] PPC tax on cryptocurrencies,” Deputy Finance Minister Pawel Gruza told Business Insider Polska. “So far, the Ministry hasn’t done anything about the PCC, except for recognizing cryptocurrencies as property rights, which automatically means obligation to pay the civil law transactions tax,” Gruza added.

The Finance Ministry introduced in April - income tax statements are due on April 30 - the new regulations for crypto transactions stirring up discontent in the local crypto community, which launched an online petition seeking to abolish it.

“Taking into account the specificity of trading in virtual currencies…entering into multiple sale and exchange contracts, the entity that trades the virtual currency may be required to pay tax in an amount that often exceeds the funds invested”, a source from the Finance Ministry acknowledged the controversy of the regulation in its current form before state-run Polish News Agency, while explaining the reasons behind the government decision to suspend the new tax.

 

Crypto taxes

The new measures concerned deals with cryptocurrencies like Bitcoin (BTC), Ethereum (ETH) and Ripple (XRP). Crypto-to-crypto, fiat-to-crypto and crypto-to-fiat trades would fall into two income tax brackets of 18% and 32%, for an annual income below and above PLN 85 528, respectively.

There is an additional 1% levy on the market value of the acquired asset, no matter profitable or not, because the Finance Ministry considers the deals with digital coins a transfer of property rights. Thus, traders may be required to pay higher taxes than the generated revenue.

In addition to the tax burden, the National Bank of Poland (NBP) also has no love for digital currency trading as it was revealed earlier this year that it funded an anti-crypto campaign on social media. It paid around USD 27 000 to YouTube stars to make videos about cryptocurrency crash, CNBC reported in February. Namely Marc Dubiel, who has nearly one million subscribers, has posted a video about how he lost money while investing in digital coins.

Poland is home to several cryptocurrency exchanges, including Abucoins, BitMarket and BitBay.