Polish jurisdiction may be attractive to crypto businesses due to the friendly governmental stance regarding such a developing industry, along with its relatively low corporate taxes and broad number of international agreements on the elimination of double taxation.

Taxes in Poland are governed by the Tax Administration Chamber, which is also tasked with maintaining a register of licensed crypto activities titled the Register of Virtual Currencies. Though the said authority hasn’t set any crypto-specific taxes, companies carrying out crypto-related economic activities in Poland are liable for paying a number of existing taxes, which are levied depending on the peculiarities of a particular product or service.

The fiscal year coincides with the calendar one, and annual tax returns have to be filed by April 30. Filing of tax declarations in the course of the year is not required.

Poland signed more than 90 international agreements that allow the avoidance of double taxation, and you can enjoy the preferential tax rate or tax exemption. To avail oneself, one has to provide a certificate of residence testifying to the seat location of the taxpayer for tax purposes.

Corporate Income Tax

The general rule is that Polish tax-resident crypto companies pay Corporate Income Tax on worldwide income, while non-resident companies are taxed only on income sourced in Poland. A company is a resident in the case where its registered office or place of management is located in Poland.

Like any other business, crypto enterprises must file, every year, income declarations for the year, with the e-Tax Office, stating the amount acquired in that tax year from the transfer of virtual currencies and stating in it the estimated income tax due in that respect. The tax return must also include the costs earned on revenues, including those when the taxpayer has not acquired revenues from the transfer of virtual currencies.

As stated in the Corporate Income Tax Act, revenues from virtual exchange for fiat money, goods, services, or any other property rights other than virtual currencies, or from settling other liabilities with virtual currencies, shall be regarded as revenues from capital gains. That is to say, revenues shall not show the value of virtual currencies obtained against other virtual currencies.

Income derived from the transfer of virtual currencies shall be subject to tax at a rate of 19%. For the purpose of this Act, income from the transfer of virtual currencies shall mean the difference obtained in a given tax year between the total revenues earned from the transfer of virtual currencies and the revenue earning costs. Costs incurred in respect of the exchange of virtual currency for other virtual currency shall not be taken into account as revenue-earning costs.

Value Added Tax

It is a legal obligation that your crypto company apply for VAT registration before commencing your economic activities in Poland and will normally take up to one month to get a VAT number. After this, the submission of VAT reporting is carried out on a monthly basis. It is possible, however, for companies to opt for quarterly reporting upon application for VAT registration.

As Polish law is in accord with the EU norms, it follows the principle of the Court of Justice of the European Union (CJEU), which defined that the service of exchanging cryptocurrencies for traditional currencies and vice versa is exempt from VAT. Other cryptocurrency goods and services supplied in Poland may be subject to value-added tax.

Social Security Contributions

Regardless of whether your crypto company is considering hiring staff or not, you will have to consider Social Security Contributions as a tax payment against the nature of your crypto activities. It is part of the payroll tax and is managed by the Social Security Institution. It accrues for certain claims: pension, disability, sickness benefits, maternity leave, insurance against injuries at work. Payments are made monthly from employers and employees.

Employers shall pay the following contributions:

• Pension – 9,76%
• Disability – 6,50%
• Accidents and injuries at work – 0,67%-3,33% (the rate depends on the type of the conducted professional activity, classified by the Polish authorities)

Podatek pobrany

The Withholding Tax refers to the Dividend distributions carried out by Polish tax residents, which are withheld by the company paying dividends and transferred to the tax authority. In most of the cases, the standard rate of 19% is applicable, though it might vary due to international agreements on the elimination of double taxation.

Interest is usually imposed at a rate of 20% in Poland, except if provided otherwise by the international agreements on avoidance of double taxation.

Interest shall be exempt from the obligation of the Withholding Tax if paid by a company with its registered office in Poland, to a company with its registered office in another EU or EEA country than Poland or Switzerland, provided that either:

• The paying company owns at least 25% of the capital in the interest-collecting company;
• The interest-collecting company owns at least 25% of the capital in the company that pays out such interest;
• In an EU or EEA state, the corporation is taxed based on its overall income, and the company paying out and the company collecting the interest both have at least 25% of the share capital held by the respective company, having been held continuously and directly for a minimum period of 2 years.

Tax Credits and Incentives

When foreign income sourced by resident companies is not protected through international agreements on the elimination of double taxation, Polish tax authorities apply tax credit procedures where resident companies remain obliged to pay Polish taxes, reduced proportionally in relation to taxes paid abroad.

Every crypto company conducting business in Poland, regardless of its size, can apply for the tax relief for research, development, and innovation. The relief allows for a special deduction of 200% of the costs because the costs are first 100% deducted as operating costs, and then they are 100% deducted from revenue.

The following costs are deductible:

• Employee’s salaries, including Social Security Contributions
• Acquisition of materials necessary for the research and development activity
• Payments for opinions and advisory services provided by experts, including results of scientific research
• Payments for scientific and research devices, together with service fees
• Patent fees; protection rights relating to a utility model, rights deriving from the registration of an industrial design
• Amortisation made in the tax year on fixed assets and intangible assets used in the conducted R&D activity
• The costs of acquiring special equipment used in the R&D activity conducted

Last but not least, before opting for which legislation would suit your crypto company best, you might wish to take a closer look at the so-called Polish Investment Zone, an incentive instrument for entrepreneurs in the form of a tax exemption for new investments aimed at providing tax relief—in other words, an exemption from Corporate Income Tax—for companies of all sizes on the condition that such investments are fully completed within 10 to 15 years.

The incentive amount is conditioned by the following criteria:

• the value of incurred eligible costs of the investment – investment capital or two-year labour costs of new employees
• state aid intensity in a chosen region
• company size

If you are determined to succeed in Poland but do not know from where to start, highly qualified and experienced consultants of Regulated United Europe will be happy to help you out with structuring your taxes, familiarize you with all the cryptocurrency regulations in Poland. It means that we keep a close eye on cryptospecific Polish taxation rules and realize the best ways to ensure not only mere compliance with local regulations but also a tax-efficient way of conducting operations. Moreover, we are glad to help you with company formation and obtaining a crypto license in Poland, as well as with accounting. Book your personalized consultation now.

Crypto Taxes in Poland in 2023

In 2023, Polish authorities have established more friendly tax rates for private and legal persons; another reason to perceive Poland as a country where crypto-related economic activities can bring more rewards and returns.

Furthermore, since Poland is a member of the Organization for Economic Cooperation and Development, more changes await due course of time related only to cryptocurrency businesses. Recently, OECD has developed a new international tax transparency platform entitled Crypto-Asset Reporting Framework, or CARF; its regulations are expected to be finally implemented in Polish law. In brief, the goal of this framework is to automate tax reporting and facilitate international sharing of the data concerned, which will increase crypto taxation standards by keeping tax authorities across member countries well-informed.

Corporate Income Tax

The Corporate Income Tax is 19%, but in 2023, some changes come into effect, important to cope with the amendments, which are changes to the Polish Corporate Income Tax Act. The implementation of the minimum income tax was first delayed until the end of the year, while the profitability ratio that will be a liability against the minimum income tax has been extended from 1 percent to 2 percent.

The exemption from capital gains tax will also be applicable in situations when the company being sold holds at least 5% of shares in any other company, where an exemption for this subsidiary has taken place on income from activity conducted within a Special Economic Zone or within a Polish Investment Zone.

The second relaxation of the regulations applies to transactions with entities in countries defined as tax havens. The documentation thresholds for transactions performed directly with companies from tax havens have been increased to 2,5 mill. PLN (approx. 532,000 EUR) for financial transactions and 500,000 PLN (approx. 106,500 EUR) for non-financial transactions. There are more changes to the Polish Corporate Income Tax Act – please feel free to contact us for further consultation in a personal meeting which you are welcome to schedule now.

Value-Added Tax (VAT)

Standard VAT rate remains 23%, and cryptocurrency transactions would still enjoy the exemption from VAT. Nonetheless, there is still an addition of more changes relevant to the local business. From January 2023, it would be possible for Polish companies to establish VAT groups, each of which is considered as one taxable person for the purposes of Polish VAT. It is not a mandatory step but can have such privileges as intra-group transactions being ignored, though they have to be recorded nonetheless. To qualify for a VAT group in Poland, companies should show proof of existing financial, economic, and organisational bonds.

Main allowances and conditions to VAT groups:

• The minimum period of a VAT group’s existence is three years;
• Permanent establishments and branches can join such groups;
• The application is to be submitted to constitute the group, and after approval, the group VAT number shall be provided to members of the group.
• A member of a VAT group is jointly and individually liable for VAT debts and penalties imposed on the whole group.
• All the entities in a VAT group have the responsibility to submit only one consolidated VAT return, and it is prohibited to submit separate VAT return for each separate entity.

Withholding Tax

The slabs of Withholding Tax still ranges between 19% and 20%, but it shall have fundamental changes because the regulations in pay and refund system have become simplified. Firstly, the amendment of the Polish Corporate Income Tax Act significantly extends the deadlines to file applications for reduced tax rates. According to the new regulations, exemptions or reduced rates for certain payments below 2 mill. PLN (approx. 425,800 EUR), for which the remitter may apply by filing a statement once in the tax year, are possible.

From January 2023, the general partners of a Joint-Stock Limited Partnership are also subject to health insurance contributions from the beginning of their business activity because they cannot utilize the allowance for start-ups. All other provisions remain unchanged in the case of Social Security Contributions. Every month, employers are obliged to pay 19.21–22.41% of the employee’s gross remuneration for the purpose of paying pension insurance, sickness insurance, disability insurance, accident insurance, and the Labour Fund.

How Do I Pay Taxes on Crypto in Poland in 2024?

Currently, in 2024, the taxation of income derived from cryptocurrency is an issue that remains very relevant for the residents of Poland. Polish tax legislation is promptly adapting to the dynamically developing world of cryptocurrencies, striving for clear regulation and fair taxation. This article will provide a detailed overview of how tax payment on cryptocurrency income is conducted in Poland, considering the rules and regulations applicable as of 2024.

Conclusion

Taxation of income received with the help of cryptocurrency in Poland presumes thorough record keeping and documentation of all the transactions made. Considering the general capital gains tax rate is 19% for an individual and similar rates apply to other legal entities, it’s very important to observe and keep up-to-date about the current tax obligations and rules. These could be properly handled with good planning and advice from tax professionals so as to reduce your taxes and avoid probable penalties for tax evasion. Thoughtful approaches with proper preparation will let the taxpayer realistically handle their responsibilities and enjoy fully the fruits of his or her cryptocurrency investments.

Following is the table of basic tax rates in Poland for 2024: personal income tax PIT, CIT – corporate income tax, value added tax VAT and other current taxes.

The following table is a rough overview of the tax system in Poland, but keep in mind that the laws change, and sometimes special conditions or deductions are applied to your particular case.

Note: Lawyers from Regulated United Europe also provide legal support for crypto projects and adaptation to MICA regulations.