Polish Tax Authority: Bitcoin Mining Profits Subject to 23% VAT

A local tax authority made the statement following a request from a Polish bitcoin miner.

AccessTimeIconMay 27, 2014 at 9:28 a.m. UTC
Updated Sep 11, 2021 at 10:48 a.m. UTC
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In the latest turn of events related to the disputed legal status of digital currencies in Poland, a local tax authority has announced that the sale of mined bitcoins is subject to a VAT (value-added tax) of 23%.

The interpretation was made by the director of the tax authorities in Łódź, central Poland, following a request submitted by a Polish bitcoin miner.

In the released statement, the authorities said that the party requested an interpretation of the Polish regulation regarding taxes imposed on the sale of mined bitcoins.

'Not a commodity'

"The applicant is planning to launch sales of the cryptocurrency as part of his commercial activity," the statement said.

According to the document, the miner's bitcoins were destined to be sold to three entities, one of which would be located outside the European Union, and a further two within its borders. These included a company headquartered in Belize, another firm which owns a website registered in the UK, and a third company that operates a website registered in Łódź.

In his correspondence with the Polish tax authorities, the applicant said that he believed none of these transactions would be subject to a Polish VAT, and asked the authorities to confirm this interpretation.

"According to the applicant [...] the sale of bitcoin is not subject to a value-added tax for commodities and services because bitcoin is not a commodity [...] and the sale of the cryptocurrency which is mined by the taxpayer does not constitute a service,” the authorities said. "The applicant said that a mined bitcoin is not a commodity [...] because it does not have a material form.”

No legal basis

However, the authorities said that such an interpretation does not have legal basis, because "the applicant is demanding a precise fee for the service [of bitcoin mining]."

"Under the current law, the applicant’s legal assessment of the said situation is incorrect,” the statement said. "The sale of the mined cryptocurrency [...] by the applicant to customers with the use of Internet and websites will constitue an activity which is subject to VAT in the territory of Poland."

"On principle [...] the imposable tax rate is 23%,” the Polish authorities said.

VAT image via Shutterstock


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