crypto taxes in Poland

TAX ON CRYPTOCURRENCIES IN POLAND – 5 KEY DETAILS

There is quite a lot of information on the internet regarding the cryptocurrency tax, i.e. who should pay it, when and according to what rules. Still, I have a feeling that the information was conveyed in a way which is not straightforward at all. This is why I decided to make this article a collection of the key fundamentals of the 2020/2021 cryptocurrency tax.

Obviously, by the ‘cryptocurrency tax’ I mean the personal income tax (PIT). So, the article regards a ‘man in the street’. I do not refer to companies/corporations dealing in cryptocurrencies, nor to entrepreneurs, who are institutions whose business is governed by the anti-money laundering and terrorist financing act – the latter are bound by some other settlement practises.

1. TAX ON CRYPTOCURRENCIES IN POLAND FOR 2020/2021: YOU ONLY PAY THE TAX ON YOUR INCOME

PIT is an acronym for Personal Income Tax. It means that you are only liable for it if your cryptocurrency transactions yield an income. Income, on the other hand, is nothing more than a difference between revenue (which is all you obtained from cryptocurrency sales or its exchange into a good or a service) and the cost of purchasing cryptocurrencies in a given year.

If you had sold no cryptocurrencies in a given year (nor had you used them to pay for, e.g., an excavator or a service), no revenue will be shown. And no income will be shown, either.

Also, if you had bought cryptocurrencies for more than you sold them in a given year, you will show no income, and you will not be liable for tax.

And remember: cryptocurrency-to-cryptocurrency exchange transactions are tax neutral.

2. TAX ON CRYPTOCURRENCIES IN POLAND FOR 2020/2021: YOU SHOW ALL PURCHASE AND SALE TRANSACTIONS

Your annual return should show all your transactions of purchasing and selling cryptocurrencies in a given year. What I mean by sale is both the sale where payment is in so-called FIAT money (PLN, USD, EUR, etc.), as well as the use of cryptocurrency to pay for, suppose, an excavator.

To arrive at the deductible expenses, we sum up all the cryptocurrency purchase transactions in our annual PIT return. The “sold” cryptocurrencies summed up will make our gross revenue. In the return form’s separate column we also show the costs of cryptocurrency purchases in previous years we never disclosed before. We show the old (“stashed away”) costs in the column for: “deductible expenses not settled in previous years.”

3. TAX ON CRYPTOCURRENCIES IN POLAND FOR 2020/2021: YOU FILE PIT-38 RETURN

We report cryptocurrency transactions in PIT-38. It is the same form in which income on the sale of shares, derivatives, etc., is disclosed.

There is, however, a special part in the return for cryptocurrency transactions – part E (Income/Expenses – Article 30b(1a)).

Click here[S1]  to download the 2020 PIT-38 return: [S1] https://www.podatki.gov.pl/media/6618/pit-38-14-_v1-0e_2020_.pdf

4. TAX ON CRYPTOCURRENCIES IN POLAND FOR 2020/2021: YOU FILE THE RETURN EVEN IF YOU ONLY BOUGHT CRYPTO

Remember that the tax return should be filed even if you only bought cryptocurrencies. In such an event you only show the expenses incurred. In this way, you will be able to settle them in the years to come.

5. TAX ON CRYPTOCURRENCIES IN POLAND FOR 2020/2021: THE RATE IS 19% PLUS EXTRA 4% FOR CRYPTOMILLIONAIRES

The tax rate is 19% on income (i.e. the difference between gross revenue and deductible expenses).

Remember that you will pay an extra 4%, the so-called solidarity surcharge, if your income exceeds PLN 1,000,000.

For more on the solidarity surcharge, please go here.

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I hope you will find this article useful. If you want to know more about the 2020 cryptocurrency tax, please read this article: “How to save on 2020 cryptocurrency taxes.” It is a record of my webinar of 30 December 2020 – unfortunately it’s in Polish only, but you may ask your Polish friends to translate the most important issues. You can also try this solution.


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13 Comments

  1. What I struggle to understand is: what if someone had cryptocurrencies before the 2020/2021 tax return? The new law on cryptocurrencies came into force just recenty, so I never cared about declaring anything before; now what happens if I was to sell all my cryptos? would the revenue be considered ALL INCOME and therefore I wouldn’t be able to deduct what I paid for them?

    • No, you can decalre the “old” cost in the 2019 tax return and then “roll” them to the next years. If you became the Polish tax resident in 2020, you can show your cost from previous years in the tax return for 2020.

  2. Hello,
    Thank you for the valuable information and in English no less.
    I have some following questions:
    1. what if send to a crypto exchange platform (Binance, Kraken etc..) let’s say 1000 euro, and now I want to take back only 900, as I used only 100. Should I report it? it was basically a transfer of funds to an exchange and back to my account.
    2. let’s say with this 100 euro, I bought and sold thousands of times as an active trader, and even passed revenues between other exchanges and I cannot retrieve or provide any proof of the transaction, just the fact that I “sold” this 100 euro and made 10K euro. Do they expect me to show every single transaction I take? or just the sum of it all?

    Thank you again,
    Nadine

    • as a rule, you should show the total value of transaction you have made using this initial 100 EUR. if you cannot prove anything (you’ve lost hostiry, exchange gone wild 🙂 it’s better to show 10k revenue and 100 eur cost than showing nothing 🙂

  3. There is any tax to be paid if I’ve been converting cripto to critpo? or cripto to stablecoins?

    Thx in advance!

  4. Hello and thank you for all the valuable information shared.
    Two questions from my side please:
    1. A taxable event for crypto (and shares) is when I close (sell) my position, preferably in profit. What if I don’t withdraw the cash from the platform (I use eToro), but I choose to further invest by buying some shares or ETF? Logic says I should pay my tax for the profit incurred, even if it was further invested, can you please confirm?
    2. As PIT is submitted in PLN, what is the exchange rate at which I should convert my profits from USD/EUR/etc to PLN for declaration purposes? Exchange rate from the day of transaction or from the day of reporting? With the recent devaluation of PLN, this can make a difference…
    Thank you in advance

    • Hi! 1) You need to declare transaction into FIAt even if you reinvest ot (a.k.a. even if there is no transfer to your bank account you should show the transaction). 2) you should use the official exchange rate published by Polish National Bank from the last working day proceeding the transaction – there is no execption form these rule

  5. I am married to o Polish citizen, I came in Poland August 2020. I applied for pobyta karta, my decision is pending, I used to crypto trading from the country (Cyprus)I have come from. Mostly from the time I am in Poland I sell crypto to Euro to wirex card, then I spend them here in Poland to polish currency. Do I have to pay taxes? If yes, from which month transaction will be counted for tax?
    It will be highly appreciated if answered my questions.
    Thank you,

  6. Hello,

    I have read your blog which is beautifully written.
    I am married to o Polish citizen, I came in Poland August 2020. I applied for pobyta karta, my decision is pending, I used to crypto trading from the country (Cyprus)I have come from. Mostly from the time I am in Poland I sell crypto to Euro to wirex card, then I spend them here in Poland to polish currency. Do I have to pay taxes? If yes, from which month transaction will be counted for tax? Do I need to show transaction from binance trade history and wirex as well?
    It will be highly appreciated if answered my questions.
    Thank you,

  7. Hi,

    Is poland based company invest their money to crypto exchange ? If yes then what will be the procedure to follow while filling the annaul company tax.

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