NFT and Defi Taxes in Poland: A Comprehensive Guide 2024

by
Pratibha Tiwari
Reviewed by
Pratibha Tiwari
min read
Last updated:

Regulatory bodies across the globe started rolling out tax laws on crypto a few years back and while the framework was precarious at best in the beginning, it has now evolved. Most countries have clear guidelines around how different crypto related transactions are taxed. However, a common pattern can be observed across all tax legislations and that would be NFT and Defi taxation.

Owing to the inherent complexity of these transactions, tax authorities have either merged their taxation under a blanket tax regime or left them untouched. Poland, despite its concrete regulatory framework does not have clear guidelines on how such transactions are taxed and the responsibility of interpreting how these transactions would be taxed falls on the investor.

Our goal today is to understand the current stance of authorities on such transactions and extrapolate how these transactions would be taxed.

A primer on Crypto Taxation 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 when converted to fiat currency, irrespective of having a cost basis of 0 PLN. Furthermore, gifts, donations, and inheritance involving crypto assets may be 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. Due to potential ambiguities in specific tax laws surrounding crypto transactions in Poland, seeking advice from a tax professional is advisable.

NFT Taxation in Poland

The Polish tax authorities are yet to release specific guidelines on NFT taxation. Any income from trading NFTs will likely be taxed as regular income. This essentially means that you will pay an income tax of 19% on any gains derived from trading NFTs.

Moreover, since crypto to crypto trades aren’t taxable in Poland, trading one NFT for another would not attract tax liabilities. You would pay taxes only if you converted your NFT to fiat. However, in most instances NFTs are sold for a platform native currency like ETH or SOL, and this implies that trading NFTs wouldn’t attract tax unless you converted the underlying assets to fiat.

Note that these are assumptions based on the current guidelines and it’s advisable to consult a professional tax consultant to gain more clarity on the subject.

Defi Taxation in Poland

The subject of Defi taxation is barely touched upon by tax authorities in Poland and is therefore one possible grey area in the Polish tax regime. Any income from staking or lending on Defi protocols would likely be treated the same way as income from ICOs, airdrops, or hard forks and taxed at a blanket rate of 19%.

But then again, consulting a tax professional would be best to gain clarity on taxation of such transactions.

Conclusion: 

Filing your crypto taxes can be intimidating especially when there are no clear guidelines on how certain transactions are taxed. Kryptos offers a smart solution to the problem by automatically generating tax reports for its users based on their transactions. We also have a team of tax consultants that help resolve any disputes and maintain the legality of tax reports to ensure compliance.

How we reviewed this article

Written by
Pratibha Tiwari

Content Creator - Kryptos, An engineer who transitioned to become a Web3 Content Writer and Creator, has contributed to core marketing teams of renowned Web3 projects.

Reviewed by
Pratibha Tiwari

Content Creator - Kryptos, An engineer who transitioned to become a Web3 Content Writer and Creator, has contributed to core marketing teams of renowned Web3 projects.

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NFT and Defi Taxes in Poland: A Comprehensive Guide 2024

By
Pratibha Tiwari
On

Regulatory bodies across the globe started rolling out tax laws on crypto a few years back and while the framework was precarious at best in the beginning, it has now evolved. Most countries have clear guidelines around how different crypto related transactions are taxed. However, a common pattern can be observed across all tax legislations and that would be NFT and Defi taxation.

Owing to the inherent complexity of these transactions, tax authorities have either merged their taxation under a blanket tax regime or left them untouched. Poland, despite its concrete regulatory framework does not have clear guidelines on how such transactions are taxed and the responsibility of interpreting how these transactions would be taxed falls on the investor.

Our goal today is to understand the current stance of authorities on such transactions and extrapolate how these transactions would be taxed.

A primer on Crypto Taxation 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 when converted to fiat currency, irrespective of having a cost basis of 0 PLN. Furthermore, gifts, donations, and inheritance involving crypto assets may be 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. Due to potential ambiguities in specific tax laws surrounding crypto transactions in Poland, seeking advice from a tax professional is advisable.

NFT Taxation in Poland

The Polish tax authorities are yet to release specific guidelines on NFT taxation. Any income from trading NFTs will likely be taxed as regular income. This essentially means that you will pay an income tax of 19% on any gains derived from trading NFTs.

Moreover, since crypto to crypto trades aren’t taxable in Poland, trading one NFT for another would not attract tax liabilities. You would pay taxes only if you converted your NFT to fiat. However, in most instances NFTs are sold for a platform native currency like ETH or SOL, and this implies that trading NFTs wouldn’t attract tax unless you converted the underlying assets to fiat.

Note that these are assumptions based on the current guidelines and it’s advisable to consult a professional tax consultant to gain more clarity on the subject.

Defi Taxation in Poland

The subject of Defi taxation is barely touched upon by tax authorities in Poland and is therefore one possible grey area in the Polish tax regime. Any income from staking or lending on Defi protocols would likely be treated the same way as income from ICOs, airdrops, or hard forks and taxed at a blanket rate of 19%.

But then again, consulting a tax professional would be best to gain clarity on taxation of such transactions.

Conclusion: 

Filing your crypto taxes can be intimidating especially when there are no clear guidelines on how certain transactions are taxed. Kryptos offers a smart solution to the problem by automatically generating tax reports for its users based on their transactions. We also have a team of tax consultants that help resolve any disputes and maintain the legality of tax reports to ensure compliance.

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