The growing popularity of crypto assets, particularly virtual currencies, has led to an increasing number of questions regarding the tax implications of new forms of activity, such as staking. One of the key issues remains whether staking rewards constitute income subject to personal income tax (PIT).
What is staking of virtual currencies?
Staking is one of the key mechanisms in blockchain networks based on the Proof of Stake (PoS) consensus model. A user, by making a certain amount of their virtual currency available in a so-called staking wallet, participates in the process of validating transactions. In return, they receive a reward in the form of additional units of the virtual currency.
This mechanism serves as an economic incentive but does not involve a traditional commercial exchange. A staking participant does not sell, exchange, or provide a service in the usual sense; instead, the reward is automatically granted by the algorithm. In practice, staking is often compared to earning interest on a virtual currency deposit, although from a tax perspective, this comparison is misleading.
Staking in the view of tax authorities
The Personal Income Tax Act provides a closed list of income sources.
For virtual currencies, the legislator explicitly states that income from the disposal of virtual currency constitutes income from capital gains. Such disposal includes, among others, the exchange of virtual currency for legal tender, goods, services, or other property rights.
However, staking does not fall within this definition since no sale, payment, or equivalent transaction takes place.
Despite the lack of an explicit statutory basis, tax authorities consistently hold that staking rewards constitute income from property rights. This view was expressed, for example, in the individual interpretation of the Director of the National Tax Information Office of 19 April 2024 (ref. no. 0112-KDIL2-2.4011.146.2024.2.IM). Such income is subject to taxation under the general tax scale.
According to the tax authorities (in line with Articles 11(2) and 11(2a) of the PIT Act), the taxable event arises when the virtual currency is received, and its value should be determined based on the market prices of comparable assets on the date of receipt. The aforementioned interpretation of 19 April 2024 also stated that the value of income should be determined analogously to other non-cash benefits.
However, this approach raises a number of doubts:
- the market for virtual currencies is highly volatile — exchange rates can fluctuate significantly even within a single day;
- the process of allocating units occurs automatically and over time, making it difficult to determine precisely when the staking reward is received.
Staking in the view of administrative courts
The position of the tax authorities is increasingly being challenged by administrative courts. Both regional administrative courts (WSA) and the Supreme Administrative Court (NSA) have ruled that receiving virtual currencies through staking does not constitute income within the meaning of the PIT Act.
According to administrative court rulings (e.g., WSA in Poznań, 9 April 2024, case I SA/Po 434/24; WSA in Wrocław, 6 December 2023, case I SA/Wr 413/23; NSA, 22 March 2022, case II FSK 1688/19; NSA, 11 March 2021, case II FSK 3296/18):
- taxable income arises only at the moment of actual economic benefit;
- staking constitutes a primary acquisition of virtual currency;
- no monetary value can be assigned at the time of acquisition, as virtual currencies are not legal tender.
The courts also point out that the reasoning of the tax authorities is often superficial and lacks clear legal justification. Consequently, individual tax interpretations are annulled due to violations of both substantive and procedural law.
According to judicial decisions, income from virtual currencies related to staking arises only at the moment of their disposal — that is, when they are exchanged for traditional currency, goods, or services. Until then, the increase in units resulting from staking remains neutral for PIT purposes.
In practice, this means that a taxpayer who accumulates virtual currencies in a staking wallet is not required to pay PIT at the time of receiving them. Only when these assets are exchanged — for example, sold for EUR, USD, or PLN — does taxable income arise. Such income is taxed at a 19% PIT rate as capital gains.
Summary
The issue of taxing cryptocurrency staking illustrates how difficult it is to apply traditional tax principles to technological phenomena. Administrative court rulings clearly indicate that staking, in itself, does not generate income within the meaning of the PIT Act.
