Expenses incurred for the purchase of equipment made in cryptocurrencies, can be included by an entrepreneur in tax costs, and the regulations limiting the possibility of including expenses in tax-deductible costs will not be applicable – such conclusion follows from the letter of the Director of the National Tax Information dated 11th May 2018 (no. 0114-KDIP2-2.4010.67.2018.1.JG).
A request for an individual interpretation was submitted by a company acquiring virtual currency units – popular bitcoins. In order to acquire cryptocurrency, the company purchases the necessary computer equipment, so-called “excavators”, for which the company sometimes pays only in the cryptocurrency.
The company’s doubts concerned the interpretation of the provisions of the Corporate Income Tax Act which stipulates, that transactions between entrepreneurs for a value over PLN 15,000.00 must be settled via a bank account. Otherwise, the entrepreneur shall be deprived of the possibility to include the incurred expenses in costs.
In the issued individual interpretation, the Director of the National Tax Administration pointed out, that under the Polish law virtual currency cannot be treated equally with the legal tender. In the opinion of the Director, in the state of affairs presented by the company, there is no “payment” of cryptocurrencies, but a conversion of cryptocurrencies as property rights into the property component in the form of so-called “excavator” being a computer equipment. At the same time, the provisions limiting the possibility of including expenses in the tax-deductible costs refer to the concept of “payment” resulting from the transaction (see Art. 19 of the Act of 6th March 2018 On the entrepreneurs’ rights, Journal of Laws 2018, item 646), thus they only cover the method of performing an obligation indicated there directly, i.e. by making a payment.
As a consequence, the acquisition by the company of an “excavator” in exchange for the transfer of property rights to cryptocurrency, entitles it, as a rule, to include the cost of obtaining the said “excavator” in tax-deductible costs, and the provisions limiting the possibility of including expenses in tax deductible costs shall not apply herein.