The upcoming set of articles will expand upon the 2019 Polish cryptocurrency regulations on how to account for cryptocurrencies in one’s personal income tax.
The three most crucial sections to come out of the 2019 regulations are listed below:
CRYPTOCURRENCIES AS A VIRTUAL CURRENCY
Until 2018, for income tax purposes, cryptocurrencies were classified as property rights. From 2019 onwards, major cryptocurrencies, like ETH, BTC, are classified as virtual currency under Polish regulations. The boundaries of what constitutes as virtual currency have also been established, making them more streamlined for accounting purposes.
OVERVIEW ON REGULATIONS AND TAXATION
The regulations that came into force in 2019 the gains from the sale of cryptocurrencies in exchange for FIAT
as gains from cash capital. Buying and selling virtual currencies has to be recorded in the PIT-38 tax form. Cryptocurrencies are taxed at a 19% tax rate, but only when they are converted to FIAT currency. Purchased cryptocurrencies are only accounted for in the annual return, and one only pays annual tax on the total settlement.
ADDITIONAL RULES
- Since stablecoins are regarded as cryptocurrencies, they are not taxed when exchanged between one another or for other cryptocurrencies.
- In case of paying with crypto via card payment, for example to purchase any goods, the owner is required
to pay tax. - Cryptocurrencies bought in a crypto ATM are also taxed, similarly to crypto purchased online.
- If a cryptocurrency holder fails to report their ownership of cryptocurrencies and the state’s authorities are made aware, they are liable to a fine of up to 75% of the cryptocurrency they own, plus additional costs.
The upcoming articles will cover how to correctly account cryptocurrency in one’s personal income tax.
