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Poland Draws Fire For 'Draconian' Virtual Currency Tax Policy

by Ulrika Lomas, Tax-News.com, Brussels

17 April 2018


A petition has been started in Poland in protest at the Government's new transaction tax on cryptocurrency trading, which is expected to be applied retrospectively.

In guidance on Poland's tax settings for virtual currency trading, issued on April 4, the Ministry of Finance said that income from the divestment of a cryptocurrency holding should be included in taxable income for the purposes of personal income tax liability.

Controversially, the Ministry also said that each cryptocurrency transaction is liable for the tax on civil law transactions at a rate of one percent of the value of the transaction, unless otherwise exempt as a result of the imposition instead of VAT. This is a burden that traders say makes the cryptocurrency industry in Poland uneconomic since the tax applies regardless of whether the trader makes a gain or a loss. Those engaged in high-frequency trading, for instance, could see inordinately high tax bills compared with any capital gain earned, since the tax is charged on each transaction.

The ruling also says that value-added tax will be levied on the purchase and sale of virtual currencies for fiat currencies and the exchange of one virtual currency for another.

TAGS: Finance | tax | value added tax (VAT) | commerce | law | internet | e-commerce | Poland | currency | regulation | trade | individual income tax | services

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