Polish Crypto Traders Rise Against New Tax Regulations
A new decision by the Polish government will levy taxes even on unprofitable crypto trades.
Cryptocurrency traders in Poland issued a petition as a protest against the local government’s decision to impose taxes on all transactions that involve digital currencies.
Last week, the Polish Finance Ministry implemented changes in the country’s tax code. They require traders to pay taxes on their income from cryptocurrency trading, regardless of whether the transactions have returned profit.
The tax law update came just weeks ahead of the deadline for Poles to file annual tax returns - April 30.
How much tax on crypto trades?
The income from crypto-to-crypto, fiat-to-crypto and crypto-to-fiat trades will be subjected to the graduated Polish income tax of 18% (for an annual income of up to PLN 85 528), or 32% (above PLN 85 528).
Moreover, the ministry considers the sale or exchange of coins a transfer of property rights. Therefore, every transaction is additionally subject to a tax of 1% of the market value of the acquired right, where unprofitable dealings are also charged.
Petition calls for tax abolition
The new tax burdens triggered discontent among Polish cryptocurrency enthusiasts and they launched an online petition seeking to abolish regulations of the virtual currency industry and hence, release the development of blockchain technology.
“We want to be active creators of this technology, not just its passive recipients in the coming years, from centralized Polish institutions or foreign entities,” the protestors wrote on change.org. They claim that the Polish government has not consulted any of the parties about the new tax law.
The initiative, which aims to collect 5,000 votes, has been signed more than 3,000 times so far.
The global picture
Polish traders of virtual currencies are indignant at the new tax law, but Poland is not a one-off case when it comes to the taxation of digital currency trading.
The US, for example, also treat cryptocurrencies as a capital asset subject to tax payment. In the UK, gains from coin trading are taxable above a certain rate, while losses are tax-free. South Korea, which doesn’t impose taxes on crypto trades as of now, is said to be considering a tax plan.
A call for a global tax consensus came from the Organization for Economic Co-operation and Development (OECD) in mid-March. In its report to the G20 member countries, the OECD said that tax administrations worldwide should co-operate to regulate cryptocurrencies, which “pose risks to the gains made on tax transparency in the last decade”.
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