Poland’s Cryptocurrency Tax Law Crashes as Investors Resist Draconian Regulation
While most stake “hodlers” in the cryptocurrency ecosystem agree that there is a need for amenable regulation of the cryptosphere, Polish digital currency investors have refused to abide by the PPC law, due to its draconian nature. Now the Polish authorities have agreed to temporarily suspend the “Civil Law Transactions Tax,” which aims to tax all crypto-related transactions regardless of profits made.
According to the Polish Press Agency (PAP), the Ministry of Finance has deemed it necessary to suspend the crypto tax law as it has realized that the guideline is nonsensical. Amidst this backdrop, the Polish Finance Ministry plans to formulate another regulation after conducting an “in-depth analysis“ of the virtual currency industry.
“The Ministry of Finance has accepted the irrational effect of the PCC tax on cryptocurrencies,” said Deputy Finance Minister, Pawel Gruza, adding:
“So far, the Ministry hasn’t done anything about the PCC, except for recognizing cryptocurrencies as property rights which automatically means obligation to pay the civil law transaction tax.”
Fighting for their Rights
The Polish government’s decision to review the cryptocurrency tax regulation did not just happen ordinarily. In April 2018, the Ministry of Finance issued a notice, stating that all digital currency transactions attract an income tax of either 18 or 32 percent, plus an additional one percent levy tax since the government sees cryptocurrency trading as a transfer of property rights.
The statement did not go down well with crypto investors in the state, and in response, they created a Change.org petition that has now attracted more than 5,000 signatures. The entreaty calls for the “release of the crypto market, and the abolition of all taxes related to this technology.”
The efforts of the protesters have now paid off as the Ministry of finance has openly acknowledged that the regulation needs to be reviewed because the current guideline makes it possible for investors to pay taxes that exceed the worth of their crypto assets.
“Taking into account the specificity of trading in virtual currencies, which boils down to trading these property rights through their purchase, sale and exchange, and therefore entering into multiple sale and exchange contracts, the entity that trades the virtual currency may be required to pay tax in an amount that often exceeds the funds invested,” the Ministry stated.
The authorities have also made it clear that the updated guideline will be ready by June 15, 2018. The Polish government has also conducted various social media campaigns targeted at discouraging citizens from investing in bitcoin and other cryptocurrencies.
The Polish crypto industry has been thrown into a state of uncertainty as no one knows for sure what the expected June 15, 2018, regulation would entail. If the guideline is still seen as harsh and unreasonable, there could be another round of protest in the nation.