Bitcoin and income tax

Bitcoin and income tax


Taxes resemble a mother. Often we don’t understand her, but rarely can we forget her. Do the characteristics of bitcoin allow for amnesia towards the fiscal? Doubtful. The reason is mundane. Virtual tokens are a reflection of real money. And where monetary value appears – you can be sure of the operation of the Personal Income Tax Act.

You bought and sold – pay tax

A simple example – the purchase and subsequent sale of bitcoin at a profit will generate a tax liability. Although in practice there are no rulings on the state of affairs in question, however, following Article 10 of the Personal Income Tax Act, the income should be included in the source of income – property rights, including their disposal against payment. The inclusion of bitcoin in the category of property rights is determined by two issues: firstly, it may be the subject of trade (marketability), and secondly, it undoubtedly has a determinable property value. The tax deductible costs will be documented costs actually incurred pursuant to Article 22(1) of the Personal Income Tax Act. The obtained revenue, a bitcoin user should report on the PIT-36 form, in section D.1., item 7 (copyright and other rights referred to in Article 18 of the Act).

Although the anonymity of bitcoin disposers is apparently great, as can be seen, it does not exempt them from the obligation to declare the profit made. Resistant taxpayers, on the other hand, should ask themselves – is depersonalisation high enough to effectively mask their personas. Well, certainly not.

Bitcoin in business

Bitcoin in business can appear in two ways – as an operational object and as a method of accepting payments.

The first scheme would involve the organised and continuous trading of virtual currency. The income would therefore qualify as a source of revenue – a business activity. However, it will need to be properly organised, as tax laws have not kept up with the pace of change – and not only that of the virtual world. An example of a problematic issue is the documentation of deductible expenses, i.e. expenses for the acquisition of bitmonet.

Let us look, for example, at the Regulation on keeping a tax revenue and expense ledger. The cited act indicates the basis for entries in the book, which are accounting evidence. They should include an indication of the parties (name and addresses) involved in the economic operation. As bitcoin users are keen to make use of its chief attribute, i.e. anonymity, let us then pose the question – will the person from whom we purchase the currency agree to provide us with their data? For many entities, this will be doubtful, since the guarantees of the decentralised payment system are the reason for its popularity.

Accepting payment in the form of bitcoin can also be done in two ways – indirectly and directly. In the first model, an intermediary (e.g. InPay) operates between the parties to the transaction, which assumes the exchange rate risk, converts the bitmonet at an appropriate rate and transfers the amount expressed in PLN to the trader.

In the second scheme, which is more complicated for the trader, the payment is made directly with the virtual currency. In this case, it will not be risky to pose the thesis that a barter transaction will occur here. The transfer of bitcoins would have to be treated as a service. Let us point out that barter is a broad concept, encompassing the exchange of services, the exchange of goods for services and services for goods. In this state of affairs, as a rule, the revenue on the part of the entity accepting payment by bitcoin will be the value of the realised benefit in kind, which should reflect market conditions. The taxable base will thus be income, understood here as the difference between revenue and the cost of acquiring the goods or the service provided. It should be remembered that the subsequent sale of bitcoins received as part of barter will generate revenue. The cost, on the other hand, should be the value of the consideration in kind as at the date of its performance, in the amount defined as above, for which the bitcoins were acquired.

Untrodden paths

Is bitmonet in business a tax inconvenience? There is no clear answer due to the early development of this form of payment or object of operation. However, the deficit of case law and practitioners’ views leads one to assume that operations with bitcoin should be carried out prudently or under the laws of other countries.

Zgodnie z wprowadzonymi od 1 stycznia 2019 r. przepisami art. 119a par. 1 Ordynacji podatkowej, czynność nie skutkuje osiągnięciem korzyści podatkowej, jeżeli osiągnięcie tej korzyści, sprzecznej w danych okolicznościach z przedmiotem lub celem ustawy podatkowej lub jej przepisu, było głównym lub jednym z głównych celów jej dokonania, a sposób działania był sztuczny. Dostępne rozwiązania prawne należy zatem każdorazowo dostosowywać do indywidualnych potrzeb biznesowych, tak aby nie narazić się na zarzut działania sztucznego, sprzecznego w danych okolicznościach z przedmiotem i celem przepisu ustawy podatkowej. Dokładne znaczenie tych wskazań normatywnych warto w każdym wypadku skonsultować z radcą prawnym, adwokatem bądź doradcą podatkowym.