Deductible costs on a PIT-38 forex filing in Poland

Late April, the trade history open in a spreadsheet, and one simple thought in your head: if the tax is 19 percent of income, then every documented expense cuts it by a fifth. Hence the temptation to list the platform subscription, the server, the course and the new monitor as costs. The problem is that a PIT-38 filing follows narrower rules than a registered business, and the catalogue of deductible costs inside it is far shorter than most guides suggest. Below I explain what genuinely counts as a cost of earning revenue in this filing, what the Polish tax authorities consistently refuse, and how to convert everything into zloty.

Where does the PIT-38 cost catalogue come from?

An individual investor settles gains on contracts for difference as income from capital, on the PIT-38 form. The basis is article 30b of the Personal Income Tax Act: the rate is 19 percent, and it applies to income, meaning revenue reduced by the costs of earning it. The return is due by 30 April of the year following the tax year.

The decisive difference from a registered business lies in how the act defines those costs for derivative instruments. An entrepreneur works from the general rule in article 22 paragraph 1 — a cost is an expense incurred to earn revenue or to preserve its source. The same rule formally applies to income from capital, but the tax authorities read it narrowly and tie it consistently to the special provision on expenses related to acquiring the instrument. In practice that means one thing: a cost is whatever can be attributed to a specific transaction, not to the fact that you trade at all.

"Expenses related to the acquisition of derivative financial instruments shall not be treated as costs of earning revenue — until the rights arising from those instruments are exercised, or the exercise of those rights is waived, or the instruments are disposed of for consideration." — Personal Income Tax Act, article 23 paragraph 1 point 38a, 1991 (author's translation of the Polish original).

That provision says not only what is a cost but also when. You recognise an expense related to acquiring an instrument at the moment the position is closed or the rights are exercised — not at the moment the money left your account. For a trader who opened a position in December and closed it in January, that is a difference of one tax year.

What can you actually record as a cost?

The list is short and follows one rule: the expense has to relate to acquiring or disposing of an instrument. That covers broker commissions charged on opening and closing a position, transaction and settlement fees taken on specific orders, and — in the case of options — the premium paid to acquire the instrument. You will find all of these in the annual statement of operations that every broker makes available.

Swap points, the cost of holding a position overnight, are a separate matter. Brokers usually book them straight into the account result and show them in the annual statement — if that is how yours works, they are already reflected in the revenue figure and you do not add them a second time. If you settle a foreign account yourself and are not sure how to treat them, that is exactly the moment to ask a tax adviser or request an individual interpretation rather than guess.

The spread is not a separate cost and you do not enter it anywhere. The difference between the bid and the ask is contained in the prices at which you open and close the position, so it reduces the result automatically. Adding it to costs on top of that simply counts the same amount twice.

What do the tax authorities refuse?

This is where "I have an invoice, so I can deduct it" stops working. Expenses on a trader's working setup — computer and monitors, a VPS server, subscriptions to analytical platforms and market data, courses, training, mentoring, books, internet, electricity, a desk, travel to conferences, and the bookkeeper's fee as well — are consistently rejected in a PIT-38 filing. The reason is always the same: none of them can be attributed to the acquisition or disposal of a specific instrument, and their link to revenue is indirect.

Nothing changes that — not a VAT invoice instead of a receipt, not a percentage split of equipment use, not a work log. Those arguments belong to a registered business, not to a capital-income filing. It is also worth knowing that trading on your own account is, as a rule, not treated as business activity, so the route of "I will register a company and then deduct the hardware" usually does not open at all — I write about that at more length in the piece on what you can deduct when trading from home. The value-added tax side of a trader's tools I cover separately in the article on VAT on trader tools.

How much do commissions alone actually change?

Even after narrowing the catalogue down to commissions, this is not an amount worth ignoring — with active trading it can be the largest cost item of the year.

The mechanism is simple: the saving always equals 19 percent of the reported cost. That is why pulling the annual commission statement from your platform is one of the few things in this filing that pays back to the last zloty.

How do you convert costs held in a foreign currency?

Accounts denominated in dollars or euro require every amount to be converted into zloty at the average National Bank of Poland rate from the last business day preceding the day the revenue was earned or the cost incurred. Not the rate from the transaction date, not the broker's rate, and not the year-end rate. This is the most common mistake on a first self-prepared filing, and across several hundred positions it can move the tax base noticeably.

The practical consequence: if you trade with a foreign broker, a spreadsheet holding the trade history with an NBP rate column against every date is indispensable. Reading the tables by hand across several hundred closes ends in errors.

Which documents do you have to keep?

A Polish broker sends a PIT-8C statement listing revenue and costs, and has until the end of February to issue it. That document does not release you from filing, though: you still submit PIT-38 yourself, and you check the figures in the statement against your own trade history.

A foreign broker will not issue one, because Polish rules do not oblige it to. In that case you prepare the whole statement yourself from the account history, and you additionally report income earned abroad on the PIT/ZG annex. Keep the documentation — annual statements, account extracts, transfer confirmations — for five years, counted from the end of the calendar year in which the tax payment deadline fell.

The most common traps

• Entering the spread as a separate cost. It is already contained in the opening and closing prices, so it lowers the result automatically. Adding it to costs means counting the same amount twice and understating the tax base.
• Treating an invoice as proof that an expense is a cost. An invoice documents the expense but does not decide how it is classified. Hardware, subscriptions and training remain private spending regardless of what sits in your folder.
• Recognising a cost in the year of payment instead of the year the position closed. For a position opened in December and closed in January, the cost belongs to the filing for the year in which the position was closed.
• Converting currency at the transaction-date rate. What applies is the average NBP rate from the last business day preceding the day the revenue was earned or the cost incurred.
• Forgetting a loss carried from earlier years. A loss on income from capital does not simply vanish, but it is settled under separate rules — I describe them in the piece on how to file a forex loss.

What to do before your next filing

1. Download the annual statement of operations from every broker where you hold an account. Look for the line described as commissions or transaction fees for the full calendar year — that is the only figure from the statement you will report as a cost of earning revenue in the return.
2. Check whether swap points are already reflected in the account result. Compare the sum of results on closed positions against the account balance, and ask your broker's support desk how it presents swaps in the annual statement. That way you neither count the same amount twice nor drop it entirely.
3. Build a spreadsheet of NBP rates if the account is held in a foreign currency. For every closed position you need the date, the amount in that currency, and the average rate from the last business day preceding that date. An hour spent on the template saves several evenings in the years that follow.
4. Set aside the expenses you will not be reporting. Keep the bills for hardware, the server, subscriptions and training for your own assessment of whether trading pays — but do not put them in the return, and you will not have to explain them if the tax office asks.
5. If you are in doubt, request an individual interpretation from the National Tax Information service. It takes a few months, but in an unusual situation — an unusual fee structure at a foreign broker, for instance — it gives you a written answer you can rely on.

For a broader view of trader record-keeping and the paperwork habits that make a filing season painless, see taxes and records on ForexMechanics.