Crypto Traders Protest as Poland Wants Tax From All Transactions

(Bloomberg) -- Digital currency traders in Poland are protesting against a government decision to levy a tax on all cryptocurrency transactions, regardless of whether the taxpayer made a profit.

The Finance Ministry published an interpretation of the country’s tax code last week, stating that income from transactions on cryptocurrencies is subject to income tax rules, with two tax brackets of 18 percent and 32 percent. More painful for traders, the tax authority also said that the act of selling or purchasing digital currencies should be considered a transfer of property rights, which is subject to a 1 percent levy on the value of the transaction, in line with rules governing civil law agreements.

Cryptocurrency traders organized an online petition saying that the rules are set to wipe out their community and could set the country back in terms of developing the blockchain technology underpinning digital currencies. The ministry’s stance was published weeks before the deadline for Poles to file their annual personal income statements on April 30.

Signed by more than 2,200 people, the petition says that the new regulations will mean that capital invested in cryptocurrencies may be taxed “hundreds or even a thousand times.” While Prime Minister Mateusz Morawiecki has called digital currencies “Ponzi schemes” in an effort to turn Poles away from such investments, the government and state-owned lenders generally support blockchain as a source of innovation in the banking industry.

“We are demanding the release of the blockchain technology market and the abolition of all taxes related to this industry,” according to the petition. “We want to be active creators of this technology, not just its passive recipients in the coming years, from centralized Polish institutions or foreign entities.”

The Finance Ministry said on its website on Monday that it’s working on a “more convenient” method of taxation for cryptocurrencies, while repeating that last week’s statement showed the binding interpretations of the current regulations.

©2018 Bloomberg L.P.