The WSA in Gliwice issued a ruling that should interest all those involved in cryptocurrency trading.
The case concerned a taxable person who had an economic activity consisting in buying and selling virtual currencies through exchanges of such currencies. In connection with its business, the taxpayer wanted to know whether, in the assessment of the interpretation bodies, it could include the cost of obtaining revenue in the purchase of cryptocurrency and how it should document these transactions for tax purposes.
A dispute over how the cryptocurrency acquires
The taxpayer claimed that in the tax revenue and expense book, any purchase of cryptocurrency should be considered as a means of payment as a purchase of commercial goods as it purchases them for further resale. Therefore, according to the Regulation of the Minister of Finance dated 26 August 2003 on the keeping of a tax revenue and income account (Journal of Laws of 2017, item 728), they shall be included in the tax statement of revenue and revenue at the date of their acquisition on the basis of an extract from the operation generated by the platform through which cryptocurrency is acquired, in column 10.
The WSA confirmed that all costs (actually incurred and properly documented) incurred for the acquisition of cryptocurrency are included in the cost of obtaining income in the business of trading cryptocurrency.
The Interpretative Body stated that expenditure on purchasing cryptocurrency in the course of its business should be recognised by the taxpayer in the cost of obtaining revenue at the time of that expenditure, i.e.
„up to date." Therefore, the taxpayer should recognise the cost of obtaining revenue in connection with transactions in the course of trade in encumbered currencies at the time of the transaction.
Expenditure on the purchase of cryptocurrency classified as commercial goods should be recorded by the taxable person in column 10 the tax revenue and expense accounts, according to purchase prices on the date of purchase.
However, the problem arose in the ability to document the purchase of cryptocurrency using the generated transaction statement. The Interpretative Body considered that such a document does not contain a catalogue of the documents underlying the accounting of the cost of obtaining revenue under the abovementioned Regulation. Such a position would de facto deprive the taxpayer of the possibility of including the purchase of cryptocurrency in the cost of obtaining revenue.
WSA recalls the principles of the hierarchy of sources of law
The taxpayer considered it appropriate to file a complaint with the WSA in Gliwice. The essence of the problem to be resolved by the court was the answer to the question whether the cost of obtaining income could be documented by means of evidence, such as lists of transactions carried out through electronic exchanges, to demonstrate that these costs were incurred in order to generate revenue.
WSA by judgment with 11 September 2018 confirmed that all costs (actually incurred and properly documented) incurred for the acquisition of cryptocurrency were included in the cost of obtaining income in the business of trading cryptocurrency.
As regards the documentation of incurred expenses, the WSA cited the line of case law of the administrative courts, which shows that it is possible to document the costs of obtaining revenue in any way acceptable in tax proceedings.
WSA recalled that according to Article 181 The evidence in tax proceedings may be in particular: tax books, declarations made by the party, witness statements, expert opinions, materials and information collected as a result of the examination, tax information and other documents collected in the course of the analytical activities of the National Tax Administration, checking activities, tax checks or customs-tax checks, and materials collected in the course of criminal proceedings or proceedings in cases of criminal proceedings fiscal criminal offence or fiscal misdemeanour.
It is therefore possible to prove that expenditure is incurred through other means of proof than those mentioned in the Regulation of the Minister of Finance.
The WSA noted that denying the taxpayer the right to document expenditure by means of evidence other than those mentioned in the Regulation could deprive the taxpayer of the right to consider the expenditure as a cost of obtaining revenue, although such expenditure, according to Article 22(1) The PIT Act should be eligible for the cost of obtaining income. This would constitute an obvious breach of the described under Article 87(1) The Constitution of the Republic of Poland rules the hierarchy of sources of law, according to which the provisions of the Act are higher than the provisions of the Regulation.
This judgment shows that it is worth giving up disputes with the tax authorities to the administrative courts. An example of this case shows that the interpretation of the law by tax authorities may be incompatible not only with tax laws but also with the Constitution.
I SA/Gl 464/18
Author:
Mikołaj Stanisławski
From 2017 related to the firm Russell Bedford Poland. In 2007 graduated from the Faculty of Law and Administration of the University of Warsaw. In years 2008-2011 he made an attorney's application. From 2011 entered on the list of lawyers at the District Bar Council in Warsaw. In 2016 He graduated from the Postgraduate Tax Studies and Tax Law of the University of Warsaw. Specializes in tax and tax matters.