Crypto merchants in Poland have been unpleasantly stunned with a controversial tax they thought they wouldn’t should pay. The Civil Law Transactions Tax (PCC) is relevant to digital asset trades carried out earlier than the introduction of final yr’s moratorium on its assortment, the Polish tax administration just lately clarified. The matter has been mentioned on European degree as nicely.
PCC Tax Applies to Crypto Transactions
In Poland, the PCC tax (Podatek od czynności cywilnoprawnych) is a 1 or 2% tax levied on gross sales of belongings outdoors the scope of Europe’s extensively carried out worth added tax (VAT). The switch tax on civil regulation transactions is often due when the vendor shouldn’t be a enterprise entity or the sale is of a movable property, actual property or numerous rights. The tax is payable by the customer and is calculated on the worth of the bought asset.
According to an interpretation of the tax code issued in April final yr, a 1% PCC tax ought to in precept apply to cryptocurrency transactions after digital cash have been acknowledged as property rights. Following protests from the nation’s crypto group and a web-based petition, nevertheless, the Ministry of Finance imposed a short lived maintain on its assortment in the summertime of 2018, which was prolonged in July this yr till June 30, 2020.
Since then, the difficulty has been hanging within the air, with the federal government in Warsaw taking time to think about its long-term coverage relating to crypto taxation whereas additionally hoping for а pan-European answer. Polish media reported that the matter has been mentioned through the Dec. 5 assembly of EU’s Economic and Financial Affairs Council (Ecofin). A choice on that degree will definitely affect the taxation of cryptocurrencies in all member states, together with Poland.
Controversial and Irrational Taxation
“In July, it seemed the case would be resolved once and for all and cryptocurrencies would be permanently exempted from this tax,” the Kryptowaluty information outlet famous in a current publish. However, the regulation adopted by Ministerstwo Finansów was solely an interim measure. What’s extra, a brand new clarification issued by the Polish National Tax Administration (KAS) states that individuals who carried out cryptocurrency buying and selling transactions earlier than July 13, 2018 are chargeable for PCC.
The company’s info service emphasised that final yr’s regulation doesn’t imply crypto trading from earlier durations shouldn’t be taxable. The clarification is dangerous information for Polish taxpayers who’ve carried out such transactions. First of all, reporting lots of or hundreds of transfers can be extraordinarily difficult. Besides, the quantity of the accrued PCC can probably exceed the income from buying and selling. The “irrational effect of the PCC tax on cryptocurrencies” was acknowledged by Poland’s deputy finance minister Pawel Gruza in an interview revealed final yr.
Applied to crypto trades, the civil regulation transactions tax additionally creates a sure controversy. Transactions which are VAT-exempt, as is the case with shopping for and promoting cryptocurrencies within the EU, are often exempt from PCC as properly. On the opposite hand, there are exceptions, because the skilled providers community KPMG explains on its web site. In Poland, the tax is due on transfers of land and buildings, for instance. In the case of crypto gross sales, the tax must be levied on every transaction over 1,000 Polish zloty, which is lower than €235.
What do you consider the rationale behind the PCC tax? Share your ideas on the topic within the feedback part under.
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