How to Avoid Crypto Taxes in Poland?

by
Pratibha Tiwari
Reviewed by
Pratibha Tiwari
min read
Last updated:
How to Avoid Crypto Taxes in Poland

Some people buy crypto for its utility, some people buy it for the trends, but most people are in for the monstrous gains. A while back, that was a good thing. People got to keep what they made as there were no taxes, but as the crypto industry progressed and amassed global adoption, regulatory bodies stepped in and upped their tax game.

As an investor, you’ve got to maintain proper records and file your taxes in time to steer clear of trouble and if you haven’t done your taxes before let us tell you, the tax rates aren’t modest. Here in Poland, you pay a 19% upfront tax on all crypto gains regardless of what kind of transactions you’re involved in.

But here’s the caveat, you can use some clever strategies to avoid crypto taxes in Poland and our conversation today is all about that. But before we dive into that, let’s understand crypto taxation in Poland in a bit more detail.

How is Crypto Taxed in Poland?

Crypto taxes are levied on the conversion of crypto into fiat or if you've spent your crypto in exchange of any goods or services. Accordingly, the method is straightforward, as explained below:

  • each buy generates "tax deductible costs" which are aggregated on an annual basis.
  • each sell generates "tax revenues" which are aggregated on an annual basis

At the year end, if tax deductible costs are in excess of tax revenues then loss will be reported and carried forward to the next year. If it’s otherwise, then you pay a 19% tax on excess tax revenues.

Mining rewards and staking tokens are taxed at the full amount upon conversion to fiat, despite having a cost basis of 0 PLN. Gifts, donations, and inheritance involving crypto assets are likely subject to Polish gift and inheritance tax based on the fair market value at the time of the tax event, considering the relationship between the donor and recipient. It's advisable to seek advice from a tax professional due to potential ambiguity in specific tax laws surrounding crypto transactions in Poland.

Strategies to Avoid Crypto Taxes in Poland

  1. HODL Your Assets

Note that crypto gains are only taxed when they’re realised, which essentially means that any gains you’ve made on crypto are not taxable unless you sell your assets. Most countries with high volumes of investment in crypto offer an exemption to people holding their assets for more than a year, but unfortunately there’s no such provision in Poland.

However, you can hold on to your assets to avoid immediate tax liabilities.

  1. Use Tax Loss Harvesting

Tax Loss Harvesting is one of the most popular strategies amongst investors and traders to avoid paying more taxes. Certain countries like Poland allow investors to offset their crypto losses against their gains to help them lower their tax liabilities.

In Poland, you can offset your crypto losses against your gains to lower your tax base and pay fewer taxes. You can even carry your losses forward as long as you have expenses that can be accounted for in the subsequent year.

  1. Convert Your Assets into Stable Coins

Trading one crypto for another does not attract tax liabilities in Poland. You can use this rule to avoid paying crypto taxes. When selling your crypto assets, convert them to stablecoins like USDC. This helps you realise your gains without having to pay any taxes.

In fact, you can use the USDC tokens to make your next purchase instead of using fiat.

Conclusion: 

While these strategies allow you to save up on your tax bill, they don’t lie outside the view of the tax authorities. They may at any moment make amendments to the tax guidelines and stop you from using these strategies, so it would be best to stay updated on any new rules or guidelines. Moreover, if you find these strategies too complicated, you can use our tax tool Kryptos that automatically employs these strategies while making your tax reports.

How we reviewed this article

Written by
Pratibha Tiwari

Pratibha Tiwari writes and manages crypto tax content at Kryptos. She brings five years of crypto and finance writing to Kryptos, blending expertise, and data with clarity to guide readers through the cryptocurrency landscape.

Reviewed by
Pratibha Tiwari

Pratibha Tiwari writes and manages crypto tax content at Kryptos. She brings five years of crypto and finance writing to Kryptos, blending expertise, and data with clarity to guide readers through the cryptocurrency landscape.

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How to Avoid Crypto Taxes in Poland?

By
Pratibha Tiwari
On
How to Avoid Crypto Taxes in Poland

Some people buy crypto for its utility, some people buy it for the trends, but most people are in for the monstrous gains. A while back, that was a good thing. People got to keep what they made as there were no taxes, but as the crypto industry progressed and amassed global adoption, regulatory bodies stepped in and upped their tax game.

As an investor, you’ve got to maintain proper records and file your taxes in time to steer clear of trouble and if you haven’t done your taxes before let us tell you, the tax rates aren’t modest. Here in Poland, you pay a 19% upfront tax on all crypto gains regardless of what kind of transactions you’re involved in.

But here’s the caveat, you can use some clever strategies to avoid crypto taxes in Poland and our conversation today is all about that. But before we dive into that, let’s understand crypto taxation in Poland in a bit more detail.

How is Crypto Taxed in Poland?

Crypto taxes are levied on the conversion of crypto into fiat or if you've spent your crypto in exchange of any goods or services. Accordingly, the method is straightforward, as explained below:

  • each buy generates "tax deductible costs" which are aggregated on an annual basis.
  • each sell generates "tax revenues" which are aggregated on an annual basis

At the year end, if tax deductible costs are in excess of tax revenues then loss will be reported and carried forward to the next year. If it’s otherwise, then you pay a 19% tax on excess tax revenues.

Mining rewards and staking tokens are taxed at the full amount upon conversion to fiat, despite having a cost basis of 0 PLN. Gifts, donations, and inheritance involving crypto assets are likely subject to Polish gift and inheritance tax based on the fair market value at the time of the tax event, considering the relationship between the donor and recipient. It's advisable to seek advice from a tax professional due to potential ambiguity in specific tax laws surrounding crypto transactions in Poland.

Strategies to Avoid Crypto Taxes in Poland

  1. HODL Your Assets

Note that crypto gains are only taxed when they’re realised, which essentially means that any gains you’ve made on crypto are not taxable unless you sell your assets. Most countries with high volumes of investment in crypto offer an exemption to people holding their assets for more than a year, but unfortunately there’s no such provision in Poland.

However, you can hold on to your assets to avoid immediate tax liabilities.

  1. Use Tax Loss Harvesting

Tax Loss Harvesting is one of the most popular strategies amongst investors and traders to avoid paying more taxes. Certain countries like Poland allow investors to offset their crypto losses against their gains to help them lower their tax liabilities.

In Poland, you can offset your crypto losses against your gains to lower your tax base and pay fewer taxes. You can even carry your losses forward as long as you have expenses that can be accounted for in the subsequent year.

  1. Convert Your Assets into Stable Coins

Trading one crypto for another does not attract tax liabilities in Poland. You can use this rule to avoid paying crypto taxes. When selling your crypto assets, convert them to stablecoins like USDC. This helps you realise your gains without having to pay any taxes.

In fact, you can use the USDC tokens to make your next purchase instead of using fiat.

Conclusion: 

While these strategies allow you to save up on your tax bill, they don’t lie outside the view of the tax authorities. They may at any moment make amendments to the tax guidelines and stop you from using these strategies, so it would be best to stay updated on any new rules or guidelines. Moreover, if you find these strategies too complicated, you can use our tax tool Kryptos that automatically employs these strategies while making your tax reports.

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