After leaving their crypto community in legal limbo for a very long time, Polish government has come out with a draconian new taxation measures that will all but destroy any crypto traders in country.
Polish government announced new measures which seem designed to curb the enthusiasm for crypto in the country. This is the second time that Poland is attracting negative attention, after Polish central bank was shown to be paying YouTube influencers to spread negative propaganda about cryptocurrencies.
The new rules introduce a 1% “civil law operation” tax for every cryptocurrency trade plus a 18-32% income tax at the end of the year. What’s more even the smallest transaction has to be declared in the PCC-3 declaration and the 1% tax has to be paid within 14 days from the day of the transaction. That’s before we consider that not all orders are fulfilled in a single transaction. In effect this could amount to more than 100% tax if a trader performed over 100 trades, and result in a loss without making at least 1% profit on each trade.
As we know all too well, crypto trades are far from always profitable, but to have to pay a 1% tax every single time is not just expensive, but also an administrative nightmare. This is a similar move to the IRS in the united States, where American citizens also have to pay tax on every single crypto transaction. This kind of policies make zero sense as there are no guarantees to make any money from simply executing a trade and will serve to scare away many small traders.
“First publications attempting to classify cryptocurrencies in legal terms really indicated that they are property rights, but now the doctrine is heading towards the recognition that cryptocurrencies are not property rights. The Polish cryptocurrency environment will have to push this position in order to avoid tax on civil law transactions (PCC),” said dr Sławomir Mentzen.
It has been rumored that Polish revenue service has been requesting trading histories from all Polish exchanges. It’s hard to know what they will be used for, but for now, anti-money laundering and counter-terrorism are the official explanations. And why wait until 4th of April to publish these rules with the tax returns deadline at the end of April? This draconian and hostile crypto tax policy has many Poles rightfully up in arms over this.