Poland Crypto Tax Guide 2024
Author: Roxy, Co-founder & CEO at Finloo
Overview
Poland is a popular destination for crypto startups and investors, thanks to its favorable regulations and supportive environment, with over 900,000 residents owning cryptocurrency. The country has been a pioneer in blockchain integration, using it for emergency services, and has recently introduced the PIT-38 tax form to simplify crypto transaction reporting.
- What is a digital payment token in Poland?
- How is crypto taxed in Poland?
- What are the crypto tax rates in Poland?
- When is the deadline for crypto taxes in Poland?
- Should Web3 Businesses register for VAT in Poland?
- Should the business file tax return if no cryptocurrency was disposed of?
What is a digital payment token in Poland?
In Poland, cryptocurrency taxation is governed by specific guidelines within Polish tax law. Under the Personal Income Tax Act, virtual currency is defined as a digital representation of value that can be exchanged for legal tender and accepted as a means of exchange. Examples include Bitcoin, Ethereum, and other cryptocurrencies. Virtual currency, however, excludes electronic money, financial instruments, bills of exchange, cheques, etc.
How is crypto taxed in Poland?
Since cryptocurrencies are treated as virtual assets in Poland, income from their disposal is reported as a capital gain in a separate section of the PIT-38 form.
It`s important to understand that exchanging one cryptocurrency for another does not itself trigger a tax liability. Therefore, if a taxpayer buys SOL and then trades it for USDC, no taxable income is recognized. However, a taxable event occurs when the taxpayer:
- exchanges cryptocurrency for a legal tender (i.e. USD, PLN, EUR);
- exchanges cryptocurrency to pay for goods or services;
- exchanges cryptocurrency for property rights or using it to settle liabilities.
Simply put, your capital gains will be only taxed if you converted your crypto to fiat. The tax base will be the difference between the sale and purchase prices, resulting in either income or capital loss. On practice, it means that majority of transactions – like trading crypto for crypto – are tax free in Poland. You pay capital gain tax on income received during one fiscal year.
What are the crypto tax rates in Poland?
All income from cryptocurrency disposals, regardless of the amount, is subject to the 19% flat tax rate. This includes various crypto activities such as trading, exchanging, mining, ICO, etc.
When is the deadline for crypto taxes in Poland?
In Poland, the company’s financial year aligns with the calendar year: it lasts from January 1st to December 31st. Starting from February 15th of the following year, Polish taxpayer must report any crypto gains to KAS (local tax office) on their annual tax returns.
The deadline for the tax return submission is 30 of April. If the deadline falls on a weekend or a holiday, the deadline would be postponed till the first working day following the holidays. The relevant tax return form for cryptocurrency is PIT-38. You can submit it online or in paper form at Tax office or Post office.
Should Web3 Businesses register for VAT in Poland?
Since 2015, the issue of cryptocurrencies taxation with VAT has been regulated in Poland. The Court of Justice of the European Union (CJEU) ruled that exchanging fiat for virtual currency and vice versa is exempt from VAT as cryptocurrencies are considered means of payment rather than property. The Ministry of Finance has affirmed this interpretation in numerous statements in line with the CJEU guidelines.
Should the business file tax return if no cryptocurrency was disposed of?
PIT-38 tax return should be submitted even if the taxpayer did not receive any income and only incurred expenses for the cryptocurrency acquisition. Businesses can carry their capital losses forward as long as they have expenses to be accounted for and in the following years, they may offset their losses against capital gains upon selling virtual currencies.
The tax treatment of crypto assets in Poland continues to evolve as the market matures, reach out to Finloo at [email protected] to find out more!
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Check out the full Global Crypto Tax Report 2024