Cryptoassets in Poland: tax traps, reporting duties and business risks

Although the Polish crypto market has grown significantly, the pace of regulatory development has not kept up. Tax authorities, once unfamiliar with even the simplest of crypto transactions, are now increasingly equipped to investigate and scrutinise more complex structures – leaving little room for anonymity or non-compliance.

Income tax implications
In Poland, the income tax treatment of cryptoassets hinges on the definition of a ‘virtual currency’ – a digital representation of value that can be exchanged for legal tender or used as a means of payment, provided it can be stored, transferred, or traded electronically.

Since 2019, profits from qualifying tokens have been classified as capital gains. A taxable event arises when virtual currency is exchanged for fiat money (traditional government-issued currency such as pounds, dollars` or euros), or – less frequently – for goods, services, or property rights other than other virtual currencies. Importantly, crypto-to-crypto transactions remain tax-exempt.

The tax base is calculated as the difference between the disposal proceeds and directly related costs – such as the purchase price or broker commissions. The applicable tax rate is a flat 19%. However, expenses related to the issuance of tokens, such as mining equipment, are not deductible. Furthermore, deductible costs must be reported in the same tax year in which they are incurred, even if the corresponding income is realized in a future period.

Income tax challenges
Current Polish regulations create uncertainty around tokens that don’t meet the official definition of a virtual currency. In the absence of specific tax rules, these tokens must be classified under general tax categories – meaning that taxpayers and advisors have to determine whether a given token should be treated, for example, as a derivative, a security, or another type of asset.

Unfortunately, this lack of guidance has led to inconsistent approaches and unpredictable outcomes. In some cases, fundamentally different tokens are taxed in the same way, while similar tokens are treated differently. This legal grey area undermines market predictability and discourages innovation in the crypto sector.

Polish tax rules also create serious obstacles for companies aiming to issue their own cryptoassets. Under the current framework, domestic issuers face a 19% income tax as soon as they sell their tokens – but they cannot deduct related costs until the tokens are redeemed. This puts Polish projects at a clear disadvantage compared to foreign issuers and makes local fundraising far less attractive.

What about VAT?
When it comes to VAT, the European Court of Justice’s ruling in the Hedqvist case is a game-changer. It confirmed that exchanging cryptocurrencies for traditional money – or even swapping one crypto for another – can be treated as VAT-exempt financial services. This was supposed to clear up a lot of confusion around how VAT applies to crypto transactions.

But there’s a catch: the exemption only applies if the cryptoasset actually works as a means of payment, not just as an investment or collectible. Even today, many people still find it tricky to figure out whether a particular token meets this condition, which still keeps the VAT treatment of crypto in a grey area.

The way Polish tax authorities treat crypto transactions makes VAT even more confusing. They see converting or paying with cryptocurrencies as taxable services. But at the same time, they treat cryptocurrencies like regular money when it comes to VAT exemptions – which doesn’t quite add up.

Because of this, how these transactions are classified can affect a company’s ability to claim back VAT. If the authorities decide that crypto operations aren’t closely related to the company’s main business, the company might have to limit its VAT deductions. This can come as an unexpected cost for businesses that just want to use crypto as a regular payment method.

NFTs (non-fungible tokens), have made VAT rules even more complicated. Unlike regular cryptocurrencies that usually act like money, NFTs are unique digital tokens representing different kinds of rights. Some NFTs give you the right to use something without actually owning it, while others might represent a mix of digital and real-world items. Because NFTs can be so different, each sale or transfer needs to be looked at closely to figure out how VAT should apply.

Enhanced reporting: How DAC8 will shine a light on crypto transactions
The world of crypto has often operated in the shadows, making it challenging for tax authorities to track who is buying and selling digital assets – and whether they’re properly reporting their income. DAC8 aims to change that by giving tax administrations much clearer insight into crypto transactions and the people behind them.

As the eighth update to the EU Directive 2011/16/EU on administrative cooperation in taxation, DAC8 expands the existing automatic information exchange system to cover cryptoassets. Its main goal? To combat tax avoidance and prevent income from slipping through the cracks, especially when taxpayers move across borders.

Starting in 2026, companies and individuals providing crypto-related services – like buying, selling, exchanging, transferring, or storing cryptoassets – will face new reporting obligations. For crypto businesses, this means a major overhaul in how they collect and verify user data, including technical upgrades and tighter anti-money laundering/know-your-customer procedures.

While DAC8 doesn’t set uniform penalties, member states must introduce strong sanctions to deter non-compliance. The first reports covering 2026 transactions will be due by 31 January 2027, so data collection needs to kick off in early 2026, regardless of when each country passes local laws.

Because EU directives don’t apply automatically, member states – including Poland – have until the end of 2025 to implement DAC8. So far, Poland has only released a draft outline. However, based on previous experience with DAC7, which was implemented late but still required retroactive reporting, it’s clear that crypto firms should prepare to start collecting data on crypto users well before final national rules are in place.

Future regulatory trajectory
As tax authorities grow more experienced and confident in dealing with cryptoassets, the regulatory risks for businesses in this space have increased sharply. The absence of clear guidance on many key issues means taxpayers – companies as well as individuals – remain vulnerable to unexpected tax reassessments and penalties.

Currently, Poland is debating a new law aimed at regulating the crypto market – a crucial moment for the industry’s future. However, the draft legislation takes a rather cautious stance on tax matters. Instead of introducing broad reforms to fix the underlying challenges, it largely keeps the existing rules unchanged, leaving many structural problems unaddressed.