Poland authorities have made a move to clarify the taxation revenues received from cryptocurrency transactions and exchanges. The ministry of finance recently published the 2019 tax form that has a dedicated category, where taxpayers will be required to make a declaration that is separate concerning their proceeds and earnings from crypto trading and transactions.
Ministertwo Finansow, this month unveiled the new PIT-38, which is a personal income tax form that will simplify the reporting and the settling of taxes related to cryptocurrencies. The form will be used by private individuals who reside in Poland. The finance ministry of the country has claimed that it will make credit authorization convenient and even more transparent. The updated form will allow Polish taxpayers to record proceeds from the sale of virtual currencies and undertake the provision of data concerning the cost of acquiring the said digital coins and tokens.
Investment costs from consecutive years can be supplemented until they are fully deducted. That notwithstanding, no deduction should be claimed from other sources of income, such as the sale of shares. To adequately report on profit from cryptocurrency transactions, Poland residents will need to obtain and provide financial statements from the digital asset exchanges that they will have conducted the transactions on.
The executive power in Warsaw has been strategizing on ways and outfits to regulate the taxation of proceeds that come in from cryptocurrency trading as from 2018. The framework that has been developed and being implemented since the beginning of this year will cover personal and corporate income tax. In the first case, profits due to digital asset trading are required to be taxed as income from cash capital. Should the trading be private, the revenue will be categorized as income from property rights and, therefore, will be taxed in accordance with the regular progressive scale with rates between 18% and 32%.
If the proceeds and the profit are categorized as a business activity, the income may be taxed with a 19% flat rate. Revenues from trading conducted by corporate entities will be regarded as capital gains. The base rate that will be paid by larger companies has been set at 19%. Smaller corporate taxpayers will enjoy a preferential rate that has been set at 15% in 2018. Starting January of 2019, reporting revenues of up to 1.2 million Euros within that year and startups established within the year will have to pay a 9% income tax should they meet a certain condition.
The new tax regime for crypto trading does not concern entities that are registered and operate as providers of cryptocurrency exchange services. That constitutes crypto-to-crypto trading platforms as well as those that exchange decentralized digital money, including bitcoin cash with traditional Fiat currencies such as the Polish zloty.