How to Declare ETF Income and Dividends in PIT-38

🧾 Introduction

Investing in ETFs (Exchange-Traded Funds) through foreign platforms like Revolut, eToro, or Interactive Brokers is a great way to grow your wealth. However, tax season in Poland can quickly turn that excitement into confusion.

Unlike Polish brokerage houses, foreign brokers often don't provide a PIT-8C form. This means you are legally required to calculate and declare your capital gains and dividends manually on the PIT-38 form.

Don't worry—it’s less intimidating than it sounds. This guide explains, in simple terms, how to:

Calculate your profit or loss from selling ETFs.
Declare dividend income properly.
Apply the correct NBP exchange rate for every transaction.
Calculate the 19% capital gains tax accurately.

🧩 The Basics: How Poland Taxes ETFs

When you invest in ETFs, you typically generate two types of taxable income. Both go onto the PIT-38 form, but they live in different sections:

Capital Gains (Zyski Kapitałowe): Money you make when you sell an ETF for more than you bought it.
- Where to put it: Part C of PIT-38.
Dividends (Dywidendy): Cash payments distributed by the ETF to shareholders.
- Where to put it: Part G of PIT-38.

Crucial Rule: You must declare these amounts in PLN (Polish Złoty), regardless of whether your account is in EUR, USD, or GBP.

🧮 Real-Life Example: Sale + Dividend

Let’s walk through a realistic scenario to see exactly how the math works. Imagine you are a tax resident in Poland using a foreign broker.

The Scenario:

Date	Event	Amount (EUR)	Details
Mar 1, 2024	Buy 10 units @ €100	€1,000	+ €2 commission
Jul 1, 2024	Dividend Payout	€20	15% tax withheld (€3)
Sep 1, 2024	Sell 10 units @ €110	€1,100	+ €2 commission

Let's break this down into the steps you'll need for your tax return.

🚀 Step 1: Calculate Capital Gains (The Sale)

Your taxable profit is simply Income minus Product Costs.

1. Calculate Income (Przychód)

This is the gross amount you received from the sale.

Sale Amount: €1,100
Exchange Rate: Use the NBP average rate from the last working day before the sale (Aug 30, 2024).
Rate: 4.60 PLN/EUR

$1,100 \text{ EUR} \times 4.60 = \mathbf{5,060 \text{ PLN}}$

2. Calculate Costs (Koszty Uzyskania Przychodu)

This includes the purchase price plus any commissions paid for both buying and selling.

Purchase: €1,002 (€1,000 price + €2 comm.) on Feb 29 (day before Mar 1).
- Rate (Feb 29): 4.40 PLN/EUR
- Cost: $1,002 \times 4.40 = \mathbf{4,409 \text{ PLN}}$
Sale Commission: €2 on Aug 30.
- Rate (Aug 30): 4.60 PLN/EUR
- Cost: $2 \times 4.60 = \mathbf{9 \text{ PLN}}$

Total Deductible Costs: $4,409 + 9 = \mathbf{4,418 \text{ PLN}}$

3. Your Taxable Profit

$5,060 \text{ (Income)} - 4,418 \text{ (Costs)} = \mathbf{642 \text{ PLN}}$

Tax Due (19%): $642 \times 0.19 = \mathbf{122 \text{ PLN}}$

💰 Step 2: Declare Dividends

Dividends are tricky because you often pay some tax abroad (e.g., 15% in the USA), and you need to settle the difference in Poland.

Gross Dividend: €20
Tax Paid Abroad: €3
Exchange Rate: NBP rate from Jun 28 (day before Jul 1) = 4.55 PLN/EUR

The Calculation

Gross Dividend in PLN: $20 \times 4.55 = \mathbf{91 \text{ PLN}}$
Tax Paid Abroad in PLN: $3 \times 4.55 = \mathbf{13.65 \text{ PLN}}$
Total Polish Tax (19%): $91 \times 0.19 = \mathbf{17.29 \text{ PLN}}$

The Deduction Rule

You can deduct the tax paid abroad from your Polish tax bill, but only up to the 19% limit.

Final Tax to Pay: $17.29 \text{ (Total Due)} - 13.65 \text{ (Paid Abroad)} = \mathbf{3.64 \text{ PLN}}$

You owe the Polish tax office 3.64 PLN.

📝 Step 3: Filling the PIT-38 Form

Here is exactly where to put these numbers on the form.

Section C: Capital Gains (Odpłatne zbycie papierów wartościowych)

Field No.	What to Enter	Value (PLN)
22	Przychód (Total Income)	5,060
23	Koszty (Total Costs)	4,418
26	Dochód (Profit)	642
31	Należny podatek (Tax Due)	122

Section G: Dividends (Dywidendy i inne udziały)

Field No.	What to Enter	Value (PLN)
44	Zryczałtowany podatek (Total 19% Tax)	17.29
46	Podatek zapłacony za granicą (Foreign Tax)	13.65
47	Różnica (Tax to Pay)	3.64

⚠️ Common Pitfalls to Avoid

❌ Using the Wrong Date: Always use the NBP rate from the day before the transaction. If the transaction was on Monday, use Friday's rate.
❌ Ignoring Small Dividends: "It's only €1, surely they don't care?" They do. All income must be reported.
❌ Forgetting Commissions: Fees reduce your tax bill. Don't leave free money on the table!
❌ Merging Currencies: Do not sum up EUR and USD totals. Convert every single transaction to PLN first, then sum the PLN values.

✅ Summary

For this example, your total tax liability is:

Capital Gains Tax: 122 PLN
Dividend Tax: 4 PLN (rounded)
Total Bill: 126 PLN

Filing PIT-38 for foreign ETFs takes a bit of work, but once you understand the formula, it's straightforward. Just remember: keep good records, use the right exchange rates, and when in doubt, consult a tax advisor.

Disclaimer: This article is for informational purposes only. I am a financial educator, not a tax advisor. Tax laws can change, so always verify with official sources.