Are you investing or have you received cryptocurrencies? Find out how to avoid tax traps

For an entrepreneur, does crypto income come from monetary capital or from business activity?

If you run a sole proprietorship (e.g. in the IT industry), and at the same time you invest private funds in cryptocurrencies outside of your business — i.e. you buy and sell them through private bank and stock exchange accountswithout using the company's infrastructure, without providing investment or advisory services to third parties and without linking these operations with business – this is, in principle, such activity cannot be qualified as income from non-agricultural business activity. — Business activity within the meaning of the Personal Income Tax Act requires, among others, features of organization and continuity, and in this configuration it can be assumed that crypto trading is carried out as private asset management, and not as an element of IT activity – says Krzysztof Burzyński.

Consequently revenues from the paid sale of virtual currencies should be settled as cash capital (Article 17(1)(11) of the PIT Act), i.e. in PIT-38 after the end of the year, at a rate of 19%.

— Income is the difference between revenues from sale (including exchange for traditional currency, goods, services or settlement of crypto liabilities) and costs specified in the Personal Income Tax Act. Income from monetary capital is not combined with income from operations, says Krzysztof Burzyński.

This approach is also confirmed by tax authorities – for example, the Director of the National Tax Information in an individual interpretation of September 18, 2025 (reference number 0115-KDIT1.4011.582.2025.1.MR).

Do I have to pay tax on airdrop?

Another tax problem related to cryptocurrencies concerns airdrops, i.e. tokens given away for free. In practice, this is a problem for those who get them.

The Director of the National Tax Information believes that airdrops may result in tax liability at the moment of receiving the tokensand not when the buyer later sells them. At the same time, the authority indicates that airdrop in principle is not a donationbut for tax purposes the received tokens should be considered to be property rights. This is the result of individual interpretations of the Director of KIS (including those of June 10, 2025, reference number 0113-KDIPT2-3.4011.186.2025.4.JŚ)

As a consequence – according to the Director of KIS – the value of the received tokens is income (it should be determined according to market prices on the day of their receipt), which must be reported in the PIT return for a given year.

Krzysztof Burzyński points out that in practice this means the need for current valuation of tokens on the day of their receipt and archiving data (rate/valuation source), because the taxpayer will be obliged to prove the correctness of the settlement.

— The position of the authority is contrary to some of the existing court decisions (including the non-final judgment of the Provincial Administrative Court in Wrocław I SA/Wr 413/23 of December 6, 2023). Hi courts indicated that revenue is generated only upon disposal (exchange for money/goods/services) – explains Krzysztof Burzyński.

In practice, the expert adds, the new position of the KIS Director means for investors the necessity of current valuation and settlement of airdrops, and in the case of subsequent sale – settlement of another profit tax (the difference between the sales price and the value on the date of receipt), which is sometimes considered as “double taxation”.

— Until the jurisprudence of the courts is unified it is safest to settle airdrops according to the KIS approach. It's worth it, of course follow court rulings and consider entering into a dispute with the tax authorities, advises Krzysztof Burzyński.

Tax consequences of acquiring cryptocurrencies in inheritance

Tax consequences will be similar in the case of acquiring cryptocurrencies, e.g. by inheritance (e.g. from a parent based on a will). According to the Inheritance and Donation Tax Act, cryptocurrencies must be treated as property rights.

– It means that their acquisition is generally subject to inheritance and donation tax (the tax obligation rests with the heir), regardless of how the cryptocurrencies are technically transferred – explains Krzysztof Burzyński. Tax authorities believe that virtual currencies fall into the category of property rights because they have economic value and can be traded.

In practice, however – says Krzysztof Burzyński – e.g. a child of the testator (descendant), you can benefit from full tax exemption under Art. 4a of the Act – provided that the formalities are completed.

Therefore, you must report the acquisition of cryptocurrencies on the SD-Z2 form to the competent head of the tax office within six months from the date on which the court's decision on the acquisition of inheritance or the preparation of an inheritance certificate becomes final. — Meeting this condition allows you to inherit cryptocurrencies tax-free, even though they generally fall within the scope of inheritance and gift tax. – emphasizes the tax advisor.

This position was also presented by the Director of KIS in an individual interpretation of April 17, 2025 (reference number 0111-KDIB2-2.4015.27.2025.1.PB).

Cryptocurrencies inherited from his wife, from her private estate

The problem with cryptocurrencies received inheritance also appears later, when, for example, the heir wants to sell them. The problem is whether the seller of cryptocurrencies can take into account the costs of obtaining revenues, since he was not the one who purchased them.

The tax office believes that the heir cannot recognize the costs. This position was taken by the Director of KIS in an individual interpretation of February 12, 2025 (reference number 0114-KDIP3-1.4011.914.2024.2.AK). The taxpayer asked whether, in the future, when selling cryptocurrencies inherited from his deceased wife (constituting her private property), he can include in the PIT-38 settlement as tax-deductible expenses the expenses that the wife incurred for their purchase – or alternatively, accept the value of the cryptocurrencies from the date of acquisition as an inheritance as an expense.

KIS found that this was not possible. The authority indicated that the costs of selling virtual currencies may only include documented expenses directly incurred for the purchase by the taxpayer and costs related to the sale. Since the expense of purchasing cryptocurrencies was borne by the wife, and the heir acquired them free of charge by way of inheritance, he did not incur an “economic” cost of acquisition. As a result, the taxpayer cannot reduce the income from sale by the expenses incurred by the testator or by the “value” of cryptocurrencies on the date of inheritance – and settles the sale in PIT-38 without such a cost (apart from the possible costs of the sale itself, if they occur and are documented).

Can you deduct costs incurred for a computer and energy for cryptocurrency mining in your PIT?

The so-called also have problems with the costs of obtaining revenues. cryptocurrency miners. They would like to include expenses on computer equipment and electricity incurred for “mining” cryptocurrencies as costs.

Neither the tax authorities nor the courts allow this. They claim that such expenses incurred by miners do not constitute tax costs when settling income from the sale of virtual currencies. This position was confirmed by the Supreme Administrative Court in its judgment of October 17, 2024 (II FSK 118/22), in which it emphasized that obtaining a new cryptocurrency unit is tax neutral, and only income from paid disposal is subject to taxation.

At the same time, the court found that “mining” is not an “acquisition” of a virtual currency, but should be treated as creation (primary acquisition). Since the Act allows you to deduct only documented expenses directly incurred to acquire a virtual currency (and the costs of its sale), expenses related to its creation – such as the purchase of equipment and electricity – do not fall into this category.

— The Supreme Administrative Court's judgment is delivered close the dispute over the possibility of including excavator and electricity costs in the PIT-38 settlement – even if without these expenses it would not be possible to create cryptocurrencies – comments Krzysztof Burzyński

Is the gas fee an income or expense from the sale of cryptocurrencies?

Investors on the cryptocurrency market also struggle with the so-called gas fee. This is the cost charged as part of the blockchain network protocol for executing a transaction, aimed at maintaining the liquidity and proper functioning of the entire network.

According to the tax authorities such a fee constitutes income from the paid sale of a virtual currency as a form of settling an existing obligation. This position was presented by the Director of the National Tax Information in individual interpretations (e.g. of November 29, 2023, reference number 0114-KDIP3-1.4011.882.2023.1.BS and 0115-KDIT1.4011.687.2023.1.MR).

Tax office position this is a problem for traders and currency traders. As Krzysztof Burzyński explains, gas fees accompany every virtual currency exchange transaction, they constitute a small fraction of the exchange value, and estimating the revenue from such a fee is very burdensome. — Fortunately, administrative courts do not share the position of the tax authorities. In subsequent judgments, they confirm that the payment of gas fee does not generate income (e.g. judgment of the Provincial Administrative Court in Warsaw of March 21, 2024, reference number III SA/Wa 178/24), says the tax advisor. The Provincial Administrative Court's judgments are still not final, so we have to wait for the final judgment of the Supreme Administrative Court on gas fees.

Author: Łukasz Zalewski, journalist of the Law section of Business Insider Polska