Citizens of Poland launched a petition on Change.org last month, calling for the fair taxation of cryptocurrency related transactions and profits, and after the collection of more than 5,000 signatures, the movement has prompted the Polish government to temporarily halt the taxation of cryptocurrency related financial dealings within their borders. There is no clear timeline for the stoppage, but Polish citizens can likely be assured that their crypto tax bills will eventually come due, whatever form they may take or amount they may represent.
Cryptocurrency Tax Confusion
Confusion and outrage over taxation, of course, is not a new matter in the world of digital currencies. Earlier this year, for example, crypto adopters in the United States had a stupendously difficult time unravelling the taxation rules for their country. The major issues being the tax implications of trading one cryptocurrency for another and the timing of when gains are actually realized. Many believed that they could sell off an asset like Bitcoin and hold it in a FIAT wallet without reporting the gains, assuming that those gains would only be realized once the money hit a brick and mortar bank account in the United States. That turned out to be incorrect as many accountants that specialize in digital assets instructed their clients to report the gains of any crypto sales regardless of the container to which the proceeds were transferred into.
Cryptocurrency Taxes in Poland
Before the interruption of taxation, gains realized on cryptocurrency transactions in Poland were not taxed in an overly aggressive manner. The Ministry of Finance indicated to citizens that they would pay either an 18% or a 32% tax on the money they earned from trading in digital coin and this is not particularly punitive in the realm of personal taxation matters. What turned out to be quite punitive was the property transfer tax that Poland had decided to levy against cryptocurrency transactions. Each and every crypto related transaction was subject to a 1% property transfer tax which made the notion of trading in money built on blockchain technology a significantly negative proposition.
Polish Government Discourages Cryptocurrency Use
The assessment of these kinds of taxes shouldn’t come as much of a surprise, however, to those that have paid attention to the manner in which the Polish government has approached cryptocurrencies. They spent nearly $200,000 on a social media campaign aimed at teaching their citizens the dangers that surround dealing in digital currencies, they’ve launched an educational website with the same angle, and long before either of these efforts were put forth, the Central Bank of Poland was implicated in an underground Youtube campaign that was aimed at undermining crypto consumer confidence.