Tax on Cryptocurrencies in Poland

Many cryptocurrency investors in Poland overlook an important issue – taxes. A lack of knowledge or neglecting tax obligations can lead to serious consequences, such as hefty fines or even loss of freedom.

Do you have to pay taxes on cryptocurrencies in Poland?

Yes, in Poland, income from digital coins is treated as income from capital investments. This means that individuals who earn profits from cryptocurrency trading must report this in their annual tax returns.

Basic rules of taxation:

• In Poland, income from cryptocurrency transactions (such as sale or exchange) is subject to personal income tax at a rate of 19%.
• Tax obligations arise at the time of selling or exchanging cryptocurrency for fiat money or other assets.

Holding period:

If you sell cryptocurrency and make a profit, the time you held the cryptocurrency does not affect tax obligations. It is important to keep a record of all transactions, as the tax will be calculated based on the difference between the purchase price and the sale price.

Reporting and submission deadlines:

• All income from cryptocurrencies must be reported in the PIT-38 tax declaration, which is submitted by April 30 of the year following the reporting year.
• It is important to remember that even if you do not withdraw funds, but make transactions with cryptocurrency, these incomes are also subject to taxation.

Withdrawal of funds:

When withdrawing funds in fiat, tax obligations arise if the total amount of withdrawn funds exceeds the amount of initial investments.

No time restrictions on withdrawals:

In Polish law, there are no strict time restrictions on withdrawing funds from the exchange. You can withdraw funds at any time; however, it is important to note that tax obligations will be determined based on all your transactions.

Example: How does tax arise when withdrawing funds?

Let's consider a specific example of investing in cryptocurrencies:

1. You deposit 50,000 PLN into the exchange.
2. You buy cryptocurrency with the entire amount, for example, Bitcoin.
3. You change your crypto assets several times.
4. After six months, you sell part of Ether for 30,000 PLN.
5. After another six months, you sell part of Bitcoin for 20,000 PLN.
6. Finally, you sell the remaining amount in USDT for 10,000 PLN.

Tax calculation:

It is important to understand that tax arises when the total withdrawal amount exceeds the amount of deposited funds. Let's consider this in more detail:

1. First withdrawal: 30,000 zł
   Withdrawal amount: 30,000 zł (less than the deposit).
   Tax: 0 zł
2. Second withdrawal: 20,000 zł
   Withdrawal amount: 20,000 zł (total withdrawal amount 50,000 zł - equal to the deposit).
   Tax: 0 zł
3. Third withdrawal: 10,000 zł
   Withdrawal amount: 10,000 zł (total withdrawal amount 60,000 zł - exceeds the deposit by 10,000 zł).
   Taxable profit: 10,000 zł
   Tax: 1,900 zł (19% from 10,000 zł).

Filling out the PIT-38 declaration

For the third withdrawal, you need to fill out the PIT-38 declaration. Here is an example of filling it out:

• Column 34 — total income (60,000 zł).
• Column 35 — expenses incurred to obtain income (50,000 zł).
• Column 37 — taxable profit (10,000 zł).
• Column 38 — tax (1,900 zł).

Important: it is necessary to keep all documents confirming the purchase of crypto assets, as they may be required for tax audits or to verify your expenses.

Conclusion

In Poland, the tax on cryptocurrencies applies to anyone who earns income from investments in digital coins. It is crucial to understand tax rates and comply with filing deadlines. Tax obligations arise if you exchanged an amount for fiat that exceeds what you initially invested.