Cryptocurrency tax



19 października 2021
Cryptocurrency tax

Cryptocurrency tax

Until April 30, you must settle income tax with the Tax Office. Unfortunately, there is a tax on cryptocurrencies in Poland. While the purchase of virtual currency itself is not subject to any tax obligation, income tax should be deducted from the sale of bitcoin. Check how to settle cryptocurrencies.

Cryptocurrency Tax 2021

Trading virtual currencies has its own specific rules. However, despite this, the Polish legislator claimed his own and made changes to the law, and thus forced taxpayers who trade or extract digital currency to settle accounts with the tax authorities. From 2019, new tax conditions apply. Bitcoin unfortunately generates a tax obligation, unless you have not exchanged it for a traditional currency or commodity within a year.

A person who incurs income or costs from making transactions in cryptocurrencies must disclose this in the settlement of the annual tax return. As of 2018, the rate of income tax on operations with bitcoin and other currencies is 19%. The obligation to settle accounts with the tax authorities exists so that the state has control over the flow of money, otherwise fraud and even money laundering would be possible. Revenue from trading in cyber currencies is considered a capital gain, so similar to trading in traditional financial instruments such as stocks or bonds.

Cryptocurrencies and tax

Fortunately, the very trade and exchange of one cryptocurrency for another is a tax neutral operation. The tax obligation arises only when the cryptocurrency is sold as a means of payment or in exchange for some goods or property rights other than cryptocurrencies.

How to settle cryptocurrencies?

However, there are several rigors as to how to settle taxes on cryptocurrencies in the context of other income from the monetary capital group. The most important of them are:

  • Possibility to combine cryptocurrency income only with other other cryptocurrency income, but cannot be combined with the sale of stocks or shares;
  • Similarly with costs, they can also be added together only with other costs resulting from cryptocurrency transactions;
  • The difference between income and costs can only be settled in cryptocurrencies.

Bitcoin: PIT settlement for entrepreneurs

It often happens that a taxpayer is also a person running a business, and as part of it, he used transactions on the cryptocurrency market. Unfortunately, the settlement cannot be made within PIT-36L, i.e. the one related to running a business, so the recognition of the transaction should result in showing income or cost outside of business activity.

PIT amount

Cryptocurrency tax is paid only once a year, there is no need to remember about it after each sale, and its amount is 19%. This means that you have to deduct 19% from your income after deducting the tax deductible costs from it. As the tax is settled only once, you must add up all sales made during the year and confront them with the purchase transactions to find the actual taxable amount.

What about loss?

If during the tax year there was a surplus of tax deductible costs over the revenues from the sale of cyber currencies, this amount increases the tax deductible costs for the next year. So even if you make a loss, it must be shown on your tax return.

The settlement period is 5 calendar years, so there is no tax loss if it is possible to settle the surplus in the next year. Nevertheless, you should remember about a few important issues, and they are:

  • permissibility of combining the surplus from several years and accounting for them in one subsequent year;
  • if you follow the interpretation of tax advisers regarding the possibility of settling the surplus, it does not have to be done in the year directly following the next one. You can freely decide when it will be settled in the next, subsequent years;
  • The entire surplus must be accounted for in one year, it cannot be divided;

How to determine the date of obtaining income from cryptocurrencies?

The income is only the profit from the conversion of the electronic currency into ordinary, traditional means of payment, goods or property rights. Therefore, the date of receipt of income should be considered the date when funds are credited to the bank account.

What could be considered a cost?

Each cost lowers the income from the sale of the cryptocurrency, and therefore the tax that must be paid is lowered. Therefore, it is worth knowing what activities can help you transfer a lower tax value.

The impact on the decrease in the value of income has:

  • costs of selling cryptocurrencies;
  • cryptocurrency purchase costs - including the costs of commission, electricity, currency mining devices, costs of purchasing subscriptions, programs or other directly related to the purchase.

As you can see, tax settlement, as in the case of any income, is not the easiest one, but by doing it regularly, you can get into a routine and learn more and more about the secrets of tax settlement on bitcoin. The only problematic thing is that cryptocurrency regulations are still not clearly defined, so they may change from year to year.

Attention! The above article neither in whole nor in part constitutes a "recommendation" within the meaning of the provisions of the Act of July 29, 2005 on trading in financial instruments or the Regulation of the European Parliament and of the Council (EU) No. 596/2014 of April 16, 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6 / EC of the European Parliament and of the Council and Commission Directives 2003/124 / EC, 2003/125 / EC and 2004/72 / EC and Commission Delegated Regulations (EU) 2017/565 of 25 April 2016 supplementing Directive 2014/65 / EU of the European Parliament and of the Council as regards organizational requirements and operating conditions for investment firms and defined terms for the purposes of this directive. The content contained on the website does not meet the requirements for recommendations within the meaning of the above-mentioned act, incl. do not contain a specific valuation of any financial instrument, do not rely on any valuation method, and do not identify investment risk.

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