ccFOUND at the Tax Office - a significant success

We have just finished a nearly 3-year battle with the Tax Office in one of our companies - ccFOUND sp. z o.o. In September 2021, the Tax Office in Wrocław-Śródmieście initiated an audit, the aim of which was to determine the correctness of settlements with the state budget in terms of CIT tax. Contrary to our interpretation provided by the National Chamber of Fiscal Control, the Tax Office classified the FOUND tokens as virtual currency and demanded a payment of nearly 400,000.00 PLN in CIT tax, along with interest as if it were a tax arrears with immediate enforceability clause, which meant that before the decision was delivered to us, the office had already commenced enforcement proceedings without informing us of any amount due.The amount due also included the revenues of the limited partnership, which in 2020 was still being settled jointly with the limited liability company.Thanks to our swift reaction, we managed to avoid the consequences and simply paid the determined tax.We lodged a complaint with the Director of the Tax Administration Chamber, who partially revoked the decision of the Tax Office (in the part concerning the limited partnership) but maintained the classification of the tokens as virtual currency, against all logic. The main arguments of the Tax Office and DIAS were based on the following assumptions: The token name implies that the asset is a cryptocurrency and therefore a virtual currency - merely using a smart contract and creating an electronic record does not automatically make the asset a cryptocurrency. The tax interpretation for the limited partnership does not encompass the activities of the limited liability company (we had interpretations for both companies, and furthermore, they are the same entity related in terms of ownership and capital). The law indicates that virtual currency refers to exchangeable assets directly into traditional currencies. DIAS argued that the mere fact of the possibility of exchanging a token for anything makes it a virtual currency. This argument lacked any sense because it roughly meant that apples and cars also fall under the category of virtual currency. Yesterday, after almost a 3-year battle, the Voivodship Administrative Court revoked the decision of DIAS and the preceding decision, ordered the reimbursement of legal representation costs in favor of ccFOUND in the amount of 6917 PLN In the oral motives, it was indicated (I quote) that by searching "tokens" on Google, materials, even from tax authorities, pop up about the necessity of distinguishing between crypto assets and cryptocurrencies. Not every token is a cryptocurrency, as in this case. that the position of DIAS claiming that tax interpretations cannot be applied to the limited liability company is unacceptable. It is the same project. that the exchangeability feature cannot be understood as DIAS did. Everything is exchangeable - cars, things. Everything can be given some measurable value. CCFOUND tokens do not meet the definition of virtual currency. In the near future, we will face another procedure to claim a refund of overpaid CIT tax and wrongly paid interest.The level of absurdity in communication with the Tax Office and the lack of understanding for the project and our assumptions was so high that we often shook our heads. However, it is good to know that common sense and logic have a chance to prevail, and it is worth taking advantage of the appeal possibilities provided by Polish law.In the background, there is also an audit in the limited partnership conducted by the same team. We fear a similar course of events despite officials being aware of the mistakes made.I will describe the situation of the audit in the limited partnership in a separate article, as it definitely deserves a separate comment.