Poland Crypto Tax: The Ultimate Guide (2024)

2023 09 26

Looking to establish a crypto business? There is no better crypto-friendly place than Poland.

Compared to the other EU nations, the country has the most flexible laws on cryptocurrency activities. In fact, Triple A reports more than 900,000 people in Poland own cryptocurrency.

Moreover, the release of PIT-38 (Personal Income Tax) has made it easier for Polish taxpayers selling and buying crypto to report crypto taxes in Poland.

Still, not a lot of aspiring business owners are aware of such changes. If you’re one of them, get to know more about how Poland's crypto tax works in this article.

What are the Polish laws on crypto?

The Polish crypto scene used to operate in a gray area due to the lack of supervision by the authorities.

But now, crypto enthusiasts and businesses can breathe a sigh of relief as virtual currency activities have officially been administered by the Register of Virtual Currencies under the Tax Administration Chamber since 2021.

For entrepreneurs, this means following a set of obligations, such as obtaining a crypto license to register their business as a Virtual Asset Service Provider (VASP). We will discuss the requirements and procedures later.

Businesses operating in the virtual currency sector are defined through the following responsibilities – according to the Polish legislation:

1. Converting virtual currencies into traditional currencies (FIAT) and vice versa

2. Trading different virtual currencies

3. Facilitating the exchanges of points (1) and (2)

4. Managing virtual currency accounts

How does the tax system work for cryptocurrency in Poland?

As a measure to provide more comprehensive protection toward financial investment, the DAC-8 regulates all cryptocurrency businesses to gather and share investor data with the members of the EU states.

In addition, to improve compliance, the AML-D reinforces a strict KYC (Know Your Customers) framework for cryptocurrency companies.

Taxable financial assets

Enterprises trading in crypto should report the following financial assets as taxable sources:

Capital Gain Tax

As per the legal annotations, business owners should calculate the deduction between the selling price and the costs for purchasing virtual currencies, such as Stock Exchange Commissions.

The reason? The profits or sales made from cryptocurrency transactions are also categorized as capital gains, which are subject to a flat capital gain tax rate of 19%.

Here’s how you calculate capital gains:

Capital Gains = Disposal Amount - Cost Basis

The same crypto tax percentage may also be applied to:

• Profits from crypto mining and staking once they are converted into fiat (government-issued currency)

• Crypto margin trades, futures, and CFDs (Contract for Difference)

• Crypto ICO (Initial Coin Offering), or funding through cryptocurrencies

Employer Tax

As a crypto employer, you must take part in the Social Security Contributions.

The Social Security Institution will apply taxes to your monthly payroll. The value collected will then be dispersed for pension funds (9,76%), disability allowance (6,50%), insurance (0,67% - 3,33%), as well as different types of leaves due to sickness or childcare.

Tax reliefs

There are also non-taxable financial assets – you can register for tax reliefs in the following cases:

Crypto losses

At times, crypto losses are inevitable. Thankfully, you can deduct them from your taxes – even if the amount you lose is way above the amount you gain.

Here’s how it works:

• State your losses during the current fiscal year, both from crypto and the rest of your financial assets, in your PIT-8 tax form.

• These losses can be exempted from tax, as long as you account them for expenses in the subsequent year.

• In case of lost or stolen crypto, there is unfortunately no provision to determine tax reliefs. Still, you can report to the tax authorities and let them know how you lost your crypto.

HODL (Holding a Crypto or Token for the Long Term)

Any crypto asset on HODL is not taxed in Poland unless gains are made.

If you are managing crypto-related assets as exemplified below, we suggest consulting the nearest tax officer or our experts at Demire Inc. as they’re recognized as a gray area in Poland:

• Decentralized Finance (DeFi), or peer-to-peer lending via public blockchains

• Airdrop, or unsolicited crypto coins or tokens

• Decentralized Autonomous Organization (DAO), a block-chain based organization that has voting rights to forecast future specific crypto projects

How to obtain a crypto license in Poland

Business owners or aspiring entrepreneurs need to fulfill the following requirements to acquire a crypto license in Poland:

• Clean criminal records

• Relevant professional qualifications

Afterward, you need to submit an electronic application and sign a compliance statement to the Minister of Finance. It may take 14 working days to process a crypto license.

The next step is to open your virtual currency company. Likewise, you’ll need to submit an e-application to the Minister of Finance that contains the following details:

• Name, surname, or company name

• The registered entrepreneur number based on the National Court Register

• Tax identification number (NIP)

• An indication that the services are within the field of virtual currencies

• Trusted personal or e-signature

• A declaration that all the data in the application is complete and true

The procedure to register crypto activities will take 14 days from the day the application is received.

Crypto entities that are operating illegally may be subject to a penalty of PLN 100,000.

The Easiest Way to Start Your Own Crypto Business

If you’re looking to start a crypto business in Poland without the hassle, simply contact our legal advisors here at Demire Inc. Just sit back and relax – we will take care of your company registration process from start to finish.

Frequently asked questions

Is cryptocurrency legal in Poland?

Yes, cryptocurrency is legal in Poland – according to the recent Polish AML Act. Cryptocurrency is regulated as “activities in the field of virtual currencies” and will be permissible for companies who have registered their businesses in Poland.

How much does a crypto license cost in Poland?

For comprehensive licensing, encompassing a wider range of services, the fee is EUR 15,000. This includes:

- New LLC company in Poland;

- Remote setup without travel;

- All 4 licences included: Crypto exchange (fiat to crypto, crypto to fiat, crypto to crypto, brokerage and wallet);

- All government and licensing fees;

- AML/KYC legal package;

- PESEL+Trusted Profile application;

- Virtual registered address 1 year;

- Compliance services consultation.

The entire process is anticipated to be completed within a timeframe of two months.

How much tax will I pay on crypto?

In Poland, cryptocurrencies – especially if classified as revenues – are designated as capital gains, which are taxed at a flat rate of 19%. Smaller enterprises may request a preferential Poland crypto tax flat rate of 15%.

Entities that report an annual income below PLN 2 million are taxed at a flat rate of 9% if they meet certain conditions.

Is Binance legal in Poland?

Yes, Binance is legal in Poland and the entity is recognized as an authorized Virtual Asset Service Provider (VASP). Polish users registered to Binance need to agree to the newest Terms of Conditions as of January 18, 2023.

Poland Crypto Tax: The Ultimate Guide (2024)