No Crypto Tax for Poland Yet
The last time we heard about Poland in the cryptocurrency world, their central bank was alleged to have launched a social media campaign against cryptocurrencies by paying content producers to come out with messages against crypto. Obviously, that strategy failed to achieve the desired results. The fact that the country is now looking into making tax laws for cryptocurrency holders and traders is a sign that the cryptocurrency community in Poland is still alive. This time around, the Polish government does not seem so hostile towards cryptocurrencies as the Ministry of Finance has decided not to tax cryptocurrency gains yet.
Reasons For the Decision to Hold on
The decision to hold off taxing cryptocurrency transactions was made in order to allow the Ministry of Finance gain more detailed knowledge about cryptocurrencies and how best to go about regulating them. This was good news for cryptocurrency traders in the country since they previously had to pay between 18% and 32% tax on cryptocurrencies they held.
This is the same narrative we get from regulators from various countries worldwide. It appears most governments are still in the learning process and are not yet certain on how to handle the cryptocurrency industry. This is not bad news for the industry since it shows that some governments are not necessarily against the technology but want to figure out how best they can regulate the industry without stifling innovation or pushing out good technical minds and businesses.
How To Go About It
Generally, the best way to go about regulating cryptocurrencies would be to give it a light touch in order to remove ambiguity, thus allowing businesses in the industry to still flourish. For instance, being clear on the type of ICOs that a country allows or distinguishing between security and utility tokens would make people and businesses in this field know whether or not they are breaking laws with their projects. Not having any laws on cryptocurrencies is not necessarily a good thing since it leaves many players in the industry confused as to what is legal or not. On the other hand, too much regulation would most likely not lead to growth.
Regulators can also make it easier for start-ups in this area to grow by not imposing requirements that are almost impossible for them to meet. For example, procedures for acquiring licenses could be made reasonably simple.
In addition, the importance of tax policies cannot be overstressed. Higher taxes would simply force businesses to leave for friendlier jurisdictions. Other European countries like Switzerland attract a lot of cryptocurrency businesses because of their tax-free approach. Notably, France recently slashed its tax on cryptocurrencies from 45% to 19%.
The move by the Polish Ministry of Finance to take a step back and come out with better-informed decisions is a good one. Hopefully, the policies they implement in the future would be favorable for the cryptocurrency community in Poland. In the meantime, cryptocurrency traders in the country can breathe a huge sigh of relief.