The politics around cryptocurrencies – what changes will 2019 bring?

The politics around cryptocurrencies – what changes will 2019 bring?

Both domestic and foreign legislators are quite cautious about cryptocurrencies. The year of 2019 will bring certain changes in taxation and fortunately these will be positive modifications. It is worth recalling that not so long ago the Polish Financial Supervision Authority (KNF) issued a warning against cryptocurrency, which may have raised suspicions that cryptocurrency might become illegal due to a regulation. Fortunately, this did not happen, although the situation still does not look overly positive.

Cryptocurrencies – changes in income tax for 2019

One of the most important legal changes to be introduced next year is the issue of taxing the process of changing one cryptocurrency for another. To date, this process has been subject to income tax, which could de facto plunge investors into a situation where any transactions on cryptocurrency would be completely unprofitable. Fortunately, in 2019 the exchange process will not be subject to income tax at all.

The tax rate on cryptocurrency in Poland will be 19% and this is unlikely to change. The acquisition of cryptographic currencies will have to be itemised in the PIT tax return form at the beginning of the year, regardless of whether the investor runs a business or not.

 

What about the tax exemption on civil law transactions?

At this point in time, the regulation on tax exemption on civil law transactions in regard to cryptocurrencies still applies. However, this regulation is provisional and expires on 30 June 2019. So what is going to happen next? Well, no one knows. There is no information about any ongoing work to resolve this stalemate.

 

The European Union – additional verification and plans for the future

The European Union, on the other hand, approaches the subject of cryptocurrency with greater urgency, although not necessarily to the benefit of investors. The European Parliament has long worked to tighten up the control and verification processes over the cryptocurrency exchange and finally voted on an agreement.

Since December this year, all clients of cryptocurrency platforms, e-wallet providers and cryptocurrency stock exchanges must register and verify their clients. Why? Sealing the tax system and a battle against criminal activities. Anonymity has always been closely related to cryptocurrencies, making them a convenient means of payment for drug dealers, fences and all kinds of criminal groups, including those involved in smuggling and human trafficking. However, the new regulations will also have a negative impact on the right to anonymity of ordinary investors.

 

ESMA and CFD on cryptocurrency

The European Securities and Markets Authority (ESMA) has decided to restrict popular leveraged transactions. This applies mainly to forex, but also to derivatives based on cryptocurrency, including the popular Bitcoin CFDs.

In turn, binary options – both based on cryptocurrencies and any others – have been banned as a gambling product.