Bonds are considered a safer investment than stocks. Many investors maintaining a diversified portfolio hold bonds as a stabilizing factor against fluctuating prices of other financial instruments. The popularity of bonds is also influenced by the offer directed at beneficiaries of the 800+ benefit, who can purchase treasury bonds with interest rates linked to inflation and an additional margin. Bond issuance raises capital not only for the State Treasury but also for local government units and companies operating in various industries, which often offer more attractive terms.
Income from bonds can arise upon their sale, upon receiving interest, or upon redemption at a discount. In both cases, the tax rate will be 19%. However, there are key differences in how it is calculated.
Bond sales
The settlement of a bond sale is essentially no different from the sale of shares. In this case, we will also pay 19% income tax, which is the difference between the purchase price and the sale price.
In the case of the sale of bonds received as an inheritance, we will account for the costs incurred by the testator in acquiring them. However, in the case of the sale of bonds received as a gift, we will not recognize any costs for obtaining income, but will reduce income by the amount of inheritance and gift tax paid.
Interest and bond redemption
Most bond buyers are not interested in speculation, but rather in generating interest income. Interest is determined as a percentage. However, sometimes bonds are issued without paying dividends. In such cases, we deal with zero-coupon bonds. They are purchased below their face value, and after an agreed-upon period, they are redeemed by the issuer. In such cases, we earn money on the discount, which is the difference between the purchase price and the face value of the bond.
Both the interest and the discount are subject to a 19% tax, and we are not entitled to recognize these as tax-deductible costs. As with stock dividends, this tax is withheld by the brokerage house.
If interest is accrued periodically, then the taxable income is the difference between the redemption amount plus interest received for the last period and the acquisition costs.
Legislators have also introduced incentives for foreign investors. If they purchase bonds issued on a foreign market by the State Treasury or a local government unit, the interest on them will be tax-exempt in Poland (meaning that it will be fully taxable in the investor's country of tax residence).
Next week we will look at tax settlements for investments in derivative instruments.
If you would like to consult your tax settlements from the stock exchange or entrust them to specialists, please contact our office.
This article is for informational purposes only and does not constitute legal advice.
Legal status as of February 10, 2025
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