Lending and collateral in cryptocurrencies – without PCC and VAT?

Cryptocurrencies are becoming an increasingly common means of settlement, including in financial transactions – such as lending or collateral. It is worth taking a look at what tax implications are associated with the use of cryptocurrencies in such situations.

Lending in traditional currencies and taxation of PCC and VAT

In accordance with a line of rulings (e.g. judgment of the Supreme Administrative Court of 26 April 2023, ref. III FSK 1989/21), entrepreneurs from outside the financial sector who incidentally grant loans are not always deemed to be VAT taxpayers. What matters is whether they act in an organised, regular and profit-oriented manner.

As a result:

• loans granted in the course of business activities – are subject to VAT (although usually exempt), but are not subject to the tax on civil law transactions (PCC).
• non-business loans – are not subject to VAT, but are subject to PCC at a rate of 0.5% (the tax liability is on the borrower).

Cryptocurrency loan – what is the tax treatment?

Tax authorities are increasingly addressing the issue of loans in cryptocurrencies – and in a way that is favourable to taxpayers.

In an interpretation of 15 November 2024 (ref. 0111-KDIB2-2.4014.239.2024.4.KK), the Director of the KIS held that a loan in cryptocurrency (e.g. USDT) is not subject to PCC tax. It was key to recognise that cryptocurrency is a property right and not money or a thing denominated in specie.

This is also confirmed by the interpretation of 6 June 2024 (ref. 0111-KDIB2-3.4014.212.2024.1.MD), which emphasises that the loan of property rights does not fall within the catalogue of activities subject to PCC – and therefore does not generate a tax obligation.

Additionally, since the activity does not constitute a business activity within the meaning of VAT, no obligation for this tax arises either.

Securing a loan in cryptocurrency also without PCC

In an interpretation of 5 December 2024 (ref. 0111-KDIB2-2.4014.263.2024.1.PB), the tax authority referred to the establishment of security in the form of a pledge on cryptocurrency transferred to an escrow wallet. The act was of a technical nature and only served to secure the return of the stablecoin (USDT) loan.

The authority considered that there was no transfer of property or a property right, so the creation of the security is also not subject to PCC.

Tax benefits and risks – what you need to know

The use of cryptocurrencies in lending and hedging transactions may involve no obligation to pay PCC and VAT – making such arrangements fiscally attractive. This is particularly important in the absence of clear regulations and interpretative practice regarding traditional loans.

However, it is worth remembering:

• individual interpretations only protect a specific applicant.
• every contractual construction requires analysis – especially in the case of large amounts or unusual solutions.
• the exchange of cryptocurrency into zlotys may result in income subject to PIT or CIT.

Crypto loan – is it worth it?

From a tax perspective, borrowing in cryptocurrency and securing a loan in crypto may be safer than traditional solutions. However, this is an area full of nuances – so it is worth consulting a tax advisor before making a decision.

Want to learn more about the taxation of cryptocurrencies? 

Get in touch with our team and see how you can optimise your financial activities in line with the regulations.