In particular, the bill outlines the differences between centralized digital money and decentralized cryptocurrency as well as the tax regime designed for crypto trading and mining.
The bill published on the government legislation center’s website was sponsored by the executives in Poland. Upon publication, the bill has been sent to the council of ministers and it is expected to be adopted later this year.
The publication states that the bill will outline the guidelines for reporting and paying taxes on incomes from crypto investments.
Previous tax rules on crypto investments that mandated investors to pay tax on all transactions. Regardless of loss or profit were reviewed as a result of unrelenting protests from polish crypto investors. It was later reported that the finance minister had admitted that the existing tax rules on crypto investments is flawed. And thus will not be imposed until it is reviewed.
Contents of the Bill
The new bill defined virtual money has the digital representation of asset in accordance with the country’s act on counteracting money laundering and terrorism financing. The bill went further to outline that cryptocurrency and centralized virtual currency are the two classes of virtual currency. In addition, the draft stated that centralized virtual currency can be a means of trade, accepted as a legal tender, transferred and stored electronically and utilized in e-commerce.
The bill further outlines the taxation of individuals and corporations. It requires all investors to include profits and revenues made from the crypto-related transactions in their declaration of taxable incomes. The transactions that must be declared include profits from trading cryptocurrencies on exchanges, trading platforms and over the counter trades in free markets. The bill also clarifies that income from the trading of goods and services for cryptocurrency will also be taxed. However, crypto to cryptocurrency exchanges will not be taxed.
Cryptocurrency miners are to pay tax based on the revenue from their mining activities. Individual miners will be taxed on the profits from the sale of their mined cryptocurrency. Individuals that mine for other people or corporations will be taxed on their remuneration.
The obligations and regulations listed in the bill are to be declared on the annual tax returns.