Poland is one of the countries where working with cryptocurrencies is strictly regulated. Any entrepreneur who decides to invest in cryptocurrencies in Poland is required to register in a special register. To get into the registry, you must fulfill several important conditions and obtain a special license. Let’s discuss how the cryptocurrency market is regulated in Poland.
How Cryptocurrency Is Regulated In Poland: Basic Provisions
Entrepreneurship in cryptocurrency is regulated in Poland and requires registration in the virtual money company registry. This legislation applies to legal organizations that provide certain services:
- buying and selling cryptocurrencies
- cryptocurrency exchange
- mediation in exchange
- keeping records of cryptocurrency transactions
What Does A Cryptocurrency License Mean In Poland?
Since November 1, 2021, a cryptocurrency commercial registry has been operating in Poland. Entrepreneurs working with cryptocurrencies had to be registered in a special register before May 1, 2022.
Thus, Poland wants to ban cryptocurrencies from sponsoring illegal activity and safeguard virtual money users. Polish officials say the record was developed for this purpose. Crypto service providers without a license will be fined PLN 100,000, or 22,000 euros.
To obtain a Poland crypto license, you need to fulfill several conditions. The most significant condition is the lack of a criminal record, which must be verified by a Polish Ministry of Justice certificate.
Second, virtual currency users and Polish cryptocurrency company representatives must be knowledgeable. This requires a year of Bitcoin labor and virtual money education. Official documentation must verify this.
However, Poland has signed double taxation avoidance agreements with more than 84 nations, making it an appealing market for entrepreneurs.
How Cryptocurrency Is Regulated In Poland: Background
The 4th EU Directive-compliant Polish parliament enacted a money laundering and terrorist funding statute in March 2018. The solutions included in this directive should make it easier to verify suspicious transactions using cryptocurrencies. Member States may implement the requirement of the directive in one of three ways:
- introduce cryptocurrency licensing
- create a register of organizations operating in the field of cryptocurrency
- define virtual currency exchange services as a type of financial service
Due to the Polish Parliament’s delay in adopting the 5th Directive, cryptocurrency exchanges and traders did not need to register or get a license. Cryptocurrency exchange services were not payments, hence no financial license was needed. Polish Parliament amended this statute on March 30, 2021, effective October 31, 2021.
Poland controls cryptocurrencies with the new KYC (Know Your Customer) barrier for crypto transactions. From October 31, 2021, customer identification is needed for transactions above 1,000 euros, up from 15,000. Cryptocurrency exchanges must declare one-time transactions above 1,000 euros. Thus, bitcoin purchases and sales over this amount need verification.
However, not all cryptocurrency traders must follow AML regulations. Consulting firms and cryptocurrency education resources are exempt.
Cryptocurrency Tax In Poland
Polish businesses and individuals must pay these taxes:
- Corporate income tax: 9% if current-year sales are less than 2 million euros, 19% if greater.
- VAT – a base rate 23%
- Personal income tax: 17%–32% (depending on kind and profit)
Crypto firms must pay taxes since they’re regulated.