Do I Pay Forex Trading Taxes in Poland?

Best brokers for Forex trading in Poland

1

9.4/10

Go to broker

eToro is a multi-asset investment platform. The value of your investments may go up or down. Your capital is at risk. Don’t invest unless you’re prepared to lose all the money you invest.

Minimum deposit:

$50, $100 (for UK clients)

Bonus for deposit:

0%

Regulation:

CySEC, FCA, ASIC

Review

The eToro broker was founded in 2007. The company promotes itself as a social trading platform working with traders from over 140 countries. The broker has several divisions operating under different jurisdictions and licensed by different regulators. For example, eToro (Europe) is licensed by the Cypriot regulator CySEC (109/10) and eToro (UK) is licensed by the British regulator FCA (583263). The broker also has a representative office in Australia and the USA. eToro Profile Details

Pros/Cons

•the minimum transaction amount for copying is $1;

•handy functionality for passive investing;

•regulated by independent monitors;

•it is possible to purchase contracts for fractional shares (that is, to invest amounts less than the cost of one share);

•it is possible to buy shares at once (not CFDs) on the US stock exchanges.

•high spreads;

•periodic technical failures in order execution;

•lack of the most popular platforms such as MetaTrader 4 and MetaTrader 5 in Europe and the CIS;

•no access to ECN systems, orders are processed only according to the STP (straight-through processing) scheme with access to specific liquidity providers;

•there is a commission for withdrawing funds;

•impolite support staff;

•inconvenient website.

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2

9.2/10

Go to broker

Your capital is at risk.

Minimum deposit:

No minimum

Bonus for deposit:

0%

Regulation:

FSC (BVI), ASIC, IIROC, FCA, CFTC, NFA

Review

The name OANDA is an acronym for “Olsen & Associates” or “Olsen AND Associates”. It is registered in the United States and provides its clients with a wide range of financial services in most countries of the world. The company was founded in 1996 and is currently regulated in four jurisdictions. The main regulator of the broker is the UK Financial Conduct Authority (FCA). Oanda Canada is licensed by IIROC. The company has several significant awards to its credit, including a victory in the category "Best Forex Trading Technologies" from the UK Forex Awards, "Best Trading Platform" from FX Week, as well as "Best Customer Service" from the US Foreign Exchange Report.

Pros/Cons

•Minimum deposit from 1 dollar.

•A large selection of the most popular trading instruments.

•Several reliable and reputable financial regulators.

•Inconvenient and poorly functioning site.

•Lack of cent accounts.

•Lack of bonus programs.

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3

9.1/10

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Minimum deposit:

$1

Bonus for deposit:

0%

Regulation:

FCA, BaFin, ASIC, MAS, CySec, FINMA, BMA, CFTC, NFA

Review

IG Markets has been providing brokerage services for retail traders since 2014. It was established in 1974 in London to work with professional traders. It is a part of the IG Group with representative offices in 17 countries. IG Markets stocks are traded on the London Stock Exchange as a part of the FTSE 250 index. The broker is regulated by FCA (Financial Conduct Authority | the UK), CySec (Cyprus Securities and Exchange Commission), ASIC (Australian Securities and Investments Commission), BaFin (the Federal Financial Supervisory Authority | Germany), FINMA (Swiss Financial Market Supervisory Authority), and NFA (National Futures Association). The IG Group global representative office is supervised by BMA (the Bermuda Monetary Authority). The broker provides services of trading Forex and different CFDs through MetaTrader 4 and its in-house platforms for retail and professional traders.

Pros/Cons

•Regulated activities and participation in compensation funds;

•No minimum deposit requirements when opening an account with the international division;

•Leverage is available for trading currencies and CFDs;

•Wide range of trading assets and markets;

•Fee rebates for new and active existing clients with large trading volumes;

•Floating spreads from 0.6 pips for retail Forex traders;

•Bonuses for new clients and partnership programs for different client categories.

•The broker can reject opening accounts to traders with low capital or insufficient knowledge of derivatives trading;

•Deposits and withdrawals can’t be made with e-wallets, electronic payment systems, or cryptocurrencies;

•Trading conditions differ for various countries, so you have to look for the broker’s website in your country.

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Forex Trading Taxation in Poland - How It Works

In Poland, Forex trading income is taxed as personal income by the National Fiscal Administration (KAS). Residents face a progressive income tax rate ranging from 17% to 32%, depending on their income level. Non-residents are subject to a flat 20% tax rate on income derived from Polish sources. To optimize tax obligations, traders should consider their residency status, utilize deductions for expenses related to trading, and stay informed about the progressive tax rates. Structuring Forex trading within legal entities and exploring double taxation treaties can also aid in maximizing profits while minimizing tax liabilities.

What are the tax rates for Forex trading income in Poland?

Poland has a progressive tax rate system that applies to income from Forex trading. The rates range from 17% to 32%. Kindly check the table below for further details.

How much trading income is tax-free in Poland?

In Poland, the tax-free trading income amount stands at PLN 30,000. This means that Forex traders, who are taxpayers earning less than PLN 30,000 annually, won't be obligated to pay taxes on their trading income.

Subjects of taxation in Poland

In Poland, fiscal residence is a key factor in KAS’s taxation framework for individuals. Tax residents bear personal income tax on global income, reflecting unlimited tax liability. Conversely, non-residents have a restricted Polish tax liability, taxed solely on income generated within Poland. A person becomes a tax resident through close ties with Poland or by residing in the country for over 183 days in a fiscal year. Resident tax rates range from 17% to 32% based on income, while non-residents face a flat 20% rate, unless a double tax treaty applies. Corporate entities, under corporate income tax, are taxed globally at 19%, with a 9% rate for small taxpayers.

Tax benefits and exemptions in Poland

Forex traders in Poland can deduct expenses like broker fees and internet costs from their trading income. The country's double taxation treaties also offer provisions that may affect the taxation of traders' income, particularly for those residing in other countries. Aside from these, there are no other special tax benefits or exemptions for Forex traders in Poland.

Case Studies

Let us examine the following people, who all engaged in foreign exchange trading in Poland during the 2023 tax year.

1. Piotr, a software developer, earns PLN 40,000 from part-time Forex trading alongside his regular job. With the option to deduct PLN 2,000 in deductions, Piotr pays an income tax of up to 17% on the remaining PLN 38,000

2. Katarzyna, a full-time Forex trader, realizes gains of PLN 150,000 in a year. Like other individuals, she deducts PLN 20,000 in deductions for expenses. However, as a full-time trader, Katarzyna must register as self-employed with the National Fiscal Administration (also known as KAS) and complete a Self-Assessment tax return of 32% of her PLN 130,000 taxable profit

3. Andrzej is a construction company owner who also trades Forex, bringing in a combined PLN 90,000 in personal income for the 2023 tax year. Because he is registered with KAS as a business owner, he is expected to pay a total of 19% corporate income tax on all of his income, including that from his construction business

Taxation tips for Forex trading in Poland

Here are some tips for novice traders to optimize tax obligations for Forex traders in Poland:

1. Understand tax residency: Be aware of the criteria that determine tax residency in Poland. If you meet the conditions for tax residency, you'll be subject to personal income tax on worldwide income, whereas non-residents are taxed only on Polish-sourced income

2. Keep detailed records: Maintain accurate records of all Forex transactions, expenses, and relevant documents. Accurate record-keeping helps in calculating taxable income, claiming deductions, and demonstrating compliance during tax audits

3. Explore double taxation treaties: If you are a resident of another country with which Poland has a double taxation treaty, explore the provisions of the treaty. These agreements may impact how your Forex trading income is taxed, potentially reducing or eliminating double taxation

4. Consider legal entity structure: If possible, conduct Forex trading within the structure of a legal entity, such as a company. This may offer tax advantages, including the possibility of a reduced corporate tax rate of 9% for small businesses in Poland

5. Stay informed on tax rates: Regularly check for updates on personal income tax rates in Poland. Being aware of any changes will help you plan your tax strategies accordingly and optimize your financial position