Cryptocurrencies and taxes in Poland
A few years ago, no one heard of cryptocurrencies. Today, it is hard to find a person who doesn’t know what Bitcoin is. Numerous businesses and individuals decided to hop on the bandwagon of the new financial trend and buy or sell virtual currencies. Polish Ministry of Finance noticed the outburst in the number of the holders of the new payment instrument. Recently, ministry officials released information for those involved in cryptocurrency trade and reminds that they need to report crypto-related incomes in the annual personal income tax statements.
Virtual currency revenue can be classified as either revenue from property rights (Article 18 of the Personal Income Tax Act) or from non-agricultural business activity (Article 10.1.3). One should note that taxable revenue is accrued not only in the case of selling cryptocurrency for traditional currency, but also when exchanging one cryptocurrency to another cryptocurrency, or even goods or services, as such exchange in the eyes of fiscal authorities constitutes disposal for consideration.
If your revenue is from property rights, it is taxable based on general rules, i.e. on the tax scale. It needs to be reported in your PIT-36 tax statement as copyright and other rights. If the revenue is classified as obtained through non-agricultural business activity, it can either be taxed on the tax scale (using the already mentioned PIT-36 form) or with a 19% flat tax rate, if the taxpayer chose this taxation method. In the latter case, the revenue should be reported in your PIT-36L form.
If you are an entrepreneur and sell or purchase cryptocurrencies as part of your activity, bear in mind that although such transactions are considered to be services provided for consideration (that are subject to value added tax), they are exempted from VAT and it is not possible to deduct VAT on goods and services regarding any virtual currency. This also applies to cryptocurrency being exchanged for another cryptocurrency.