In November 2020, Polish authorities released the new PIT-38 (personal income tax) form to make it easier for Polish residents to report their crypto taxes. The Polish government does not consider crypto to be a “currency unit, a payment instrument, or electronic money.” Polish residents must provide financial statements from the crypto exchange they used to purchase and sell the digital coins to correctly report their profits from crypto trading. Polish residents can deduct investment costs from consecutive years. However, Polish residents may not deduct other sources of income, like the sale of shares.
The Polish crypto tax regime concerns personal and corporate income taxes. It does not concern crypto exchange providers. For personal income taxes, profits from crypto transactions are taxed as income from cash capital. For private transactions, the revenue is regulated as income from property rights, and the gain is taxed progressively at rates between 18% and 32%. Profits from business activities are taxed at a flat rate of 19%. Crypto revenues of corporate entities are classified as capital gains. For larger companies, the tax rate is a flat 19%. Smaller companies are provided with a preferential flat rate of 15%. Entities reporting revenues under €2 million Polish złoties (or about $320,200 US dollars) are taxed at a 9% tax rate if they meet certain conditions.
Furthermore, the Polish Financial Supervision Authority (KNF) granted two licenses to two crypto startups as payment providers. The two companies, Coinquista and Bitclude, are now authorized to “process payment transactions, transfer funds, and execute direct debits. Under their licenses, the crypto companies will also be allowed to use payment cards and issue payment instruments.”
P.S. Insights on Cryptocurrency Legal Issues
Most jurisdictions and authorities have yet to enact laws governing cryptocurrencies, meaning that, for most countries, the legality of crypto mining remains unclear.
Under the Financial Crimes Enforcement Network (FinCEN), crypto miners are considered money transmitters, so they may be subject to the laws that govern that activity. In Israel, for instance, crypto mining is treated as a business and is subject to corporate income tax. In India and elsewhere, regulatory uncertainty persists, although Canada and the United States are relatively friendly to crypto mining.
However, apart from jurisdictions that have specifically banned cryptocurrency-related activities, very few countries prohibit crypto mining.
Our Freeman Law Cryptocurrency Law Resource page provides a summary of the legal status of cryptocurrency for each country across the globe with statutory or regulatory provisions governing cryptocurrency. The globe below provides links to country-by-country summaries:
Is cryptocurrency legal in Poland?
Do you have questions about cryptocurrency, digital currencies, or blockchain technology?
Freeman Law can help with digital currencies, tax planning, and tax compliance. Contact us now to schedule a consultation, or call (214) 984-3410 to discuss your cryptocurrency and blockchain technology concerns.
[1] Lubomir Tassev, Tax Form to Report Revenues From Cryptocurrency Trading Issued in Poland | Taxes Bitcoin News. (2019, October 26). Bitcoin News.
[2] Lubomir Tassev, The Daily: Crypto Startups Licensed in Poland, Bank Trials Cryptocurrency Wallet | The Daily Tip Bitcoin News. (2019, January 24). Bitcoin News.
