During our practice we have served versatile consulting to foundations, public funds, corporations and individual investors.
During our practice we have served versatile consulting to foundations, public funds, corporations and individual investors.
Determining the legal status of cryptocurrencies is causing huge controversy around the world. In most countries, legal provisions that directly affect cryptocurrencies have not yet been enacted. This is because investing in cryptocurrencies is an extremely innovative industry, and the legal system is not always keeping up with the changing reality.
In Poland, the activity related to the trading of cryptocurrencies is completely legal; however, the Ministry of Finance refuses to give them the status of currency or any other financial instrument. Bitcoin and other cryptocurrencies are treated as property rights. In connection with the still growing interest in trading in cryptocurrencies and increasing profits from this activity, the Ministry of Finance issued guidelines on cryptocurrencies, and specifically on how such activities should be taxed. The instruction, issued by the Ministry of Finance on April 4, 2018, indicates the effects of trade in cryptocurrencies in the value added tax (VAT), income tax and tax on civil law transactions (PCC).
The instruction of the Ministry of Finance confirms the decision of the Court of Justice of the European Union in 2015, in which it was stated that the tax on goods and services (VAT) should not be charged for the trade in cryptocurrencies. According to this interpretation, the sale and exchange of cryptocurrencies into traditional currency and contrariwise, as well as the exchange of one cryptocurrency for another, takes advantage of the exemption from paying the tax on goods and services.
It is mandatory to pay income tax. The amount of this tax depends on who trades cryptocurrencies - a natural person or a legal person. A person who does not conduct business in an organized and continuous manner, but has obtained any profit from trading in cryptocurrencies, has to assess its transactions and provide file of tax declaration until 30 April and pay tax at the first tax rate of 18% or 32% if the second threshold is exceeded tax. The corporate income tax is 15% or 19% depending on the type of enterprise. Anyone who is a Polish tax resident is obliged to pay income tax. The place of earning income is irrelevant - a Polish tax resident is obliged to pay a tax on earned income in connection with every transaction concluded on both the Polish and foreign cryptocurrency market. It is worth remembering that the taxpayer should have thoroughly documented all transactions. The manner of documenting transactions related to the trading of cryptocurrencies is one of the problems that have not been explained so far, because as it is known, the cryptocurrency market does not issue invoices, which would be obvious proof of the purchase of cryptocurrencies. Although transaction histories are available on the cryptocurrency markets, such documentation may not be sufficient for the tax authority in the case of an audit.
In addition, every person concluding a contract for the sale or exchange of cryptocurrencies, which is a property right, is obliged to pay a tax on civil law transactions (PCC). The tax in the amount of 1% of the market value of the purchased property right applies to the buyer in the case of a sales contract or jointly and severally between the parties to the transaction, in the case of a conversion contract. As a general rule, a tax on civil law transactions should be paid if the seller is a natural person, regardless of who is the buyer. If the seller is an entrepreneur, then you do not need to pay this tax. For example, when you buy cryptocurrencies on the cryptocurrency market, where you can’t verify if the seller is a natural person or an entrepreneur, you are obliged to pay tax on civil law transactions. However, if you make such a purchase in an online currency exchange, there is no such obligation, because the currency exchange office from which we buy a cryptocurrency is an entrepreneur.
Especially noteworthy is the banks' approach to trading in cryptocurrencies, as banks have recently begun to terminate bank account agreements with entities whose operations involve trading in cryptocurrencies. This applies to cryptocurrency markets and online exchange offices. However, according to bank declarations, the turnover of cryptocurrencies in the case of individual clients is not a reason to close accounts, unless there is a suspicion of committing a crime using a virtual currency.
