Expenses for cryptocurrency mining are not tax-deductible costs.

The method of acquiring cryptocurrencies using the “Proof of Work” approach, also known as virtual currency “mining,” is a popular yet energy-intensive way to obtain cryptocurrency. This process utilises devices equipped with significant computational power, most commonly advanced graphics cards (GPUs). Consequently, the entire process involves high energy consumption and expenses on equipment called “miners.” Taxpayers involved in this type of activity are primarily interested in the possibility of including these costs as tax-deductible expenses related to income generation. Unfortunately, as is often the case with virtual currencies, individual tax rulings are marked by significant inconsistency, and the tax authority’s position conflicts with administrative court rulings.

The taxpayer’s situation

This was demonstrated by the recipient of an individual tax ruling issued on 30 August 2022 (ref. 0114-KDIP3-1.4011.656.2022.1.PZ).