Taxation of Genesis Token Allocations

Genesis allocation—the initial distribution of tokens created contemporaneously with the establishment of a new blockchain network—presents novel questions of tax characterization that Polish revenue authorities are only beginning to address. The distinctive feature of this mechanism lies in its temporal paradox: tokens are allocated at a moment when no market exists to establish their value. A project may ultimately succeed, with its tokens achieving substantial valuations, or it may fail entirely, leaving holders with assets of zero worth.

This Article examines the current interpretive position of the Director of the National Tax Information (Dyrektor Krajowej Informacji Skarbowej, hereinafter “KIS Director”) and the jurisprudence of administrative courts concerning the taxation of genesis allocations. The analysis proceeds in five parts. Part I provides essential background on the technical mechanisms of token distribution. Part II establishes the statutory framework governing virtual currency taxation in Poland. Part III analyzes the pivotal interpretive rulings and judicial decisions that constitute the emerging doctrinal landscape. Part IV situates these developments within the broader international regulatory context. Part V offers practical recommendations and concludes with observations regarding the systemic implications of current interpretive approaches.

 

I. Token Distribution Mechanisms: Definitions and Market Context

Any rigorous tax analysis must begin with a clear understanding of the market mechanisms that determine how participants in the blockchain ecosystem acquire tokens. The technical and economic characteristics of different distribution methods bear directly on the question of when, if at all, taxable income arises.

A. Genesis Allocation: The Primary Distribution

Genesis allocation constitutes the initial distribution of the total (or initial) token supply of a blockchain at the moment of chain creation or during a Token Generation Event (TGE). From a technical perspective, this allocation is encoded in the genesis file or genesis block and establishes initial balances for specified addresses—typically those belonging to the founding team, early investors, community participants, and the protocol treasury. The genesis block itself serves as the foundation of every blockchain, representing the first block from which all subsequent blocks derive.

The defining characteristics of genesis allocation include predetermined percentage allocations for various categories of beneficiaries (e.g., X% for the team, Y% for investors, Z% for community and ecosystem development), the absence of market price at the moment of allocation (tokens exist on-chain but are not yet traded on open markets), and typical purposes encompassing team allocations, early investor allocations, protocol treasury, and liquidity bootstrapping.

By way of illustration, a protocol might establish an initial token supply with predefined allocations for seed investors, Series A participants, core contributors, research and development, and community initiatives.

 

B. Airdrops: Community Distribution

A cryptocurrency airdrop constitutes the distribution of gratuitous tokens to numerous wallet addresses, employed as a marketing and community-building instrument. Projects utilize airdrops to reward early users, decentralize token ownership, and generate attention for a new token or protocol.

The mechanics of airdrops comprise three principal elements. First, eligibility criteria—holding a specified token, interacting with a decentralized application, or completing designated tasks (social media engagement, referrals). Second, snapshot—the project records wallets and balances or activity at a specified block or time. Third, distribution—a smart contract or script transmits tokens to eligible addresses; recipients may sometimes be required to claim them through a decentralized application.

Airdrops may be “announced” (users engage in farming behavior in anticipation) or “unexpected” (users learn only ex post that their prior activity renders them eligible).

 

C. Retroactive Airdrops and Retroactive Grants

Retroactive airdrops (frequently denominated “retrodrops”) constitute a particular subspecies of distribution—tokens are awarded ex post to users on the basis of prior on-chain behavior, before any public promise of an airdrop existed. They function as retroactive grants: the project recognizes earlier contributions (trading, liquidity provision, testnet usage, governance participation) and rewards them after the fact.

The typical progression of a retroactive airdrop encompasses extraction of historical usage data and construction of an eligibility list, filtering of Sybil and bot patterns to the extent feasible, announcement of the retroactive drop, and opening of a claiming window with allocation determined by contribution scoring (volume, liquidity, duration).

From a tokenomics perspective, retroactive grants are typically funded from the “community” or “ecosystem” portion of the initial allocation or from the DAO treasury.

 

D. Canonical Market Cases

The following historical cases of token distribution have shaped current market practices and ecosystem participant expectations.

Uniswap (UNI, 2020) conducted a retroactive airdrop for every address that had utilized the Uniswap protocol at least once before September 1, 2020. Each qualifying address received 400 UNI. This case became the paradigm for retrodrops in the DeFi sector.

Arbitrum (ARB, 2023) conducted a retroactive airdrop based on interaction with Arbitrum One and Nova—bridging, transaction volume, and liquidity provision. A tiered allocation system was employed with a minimum of approximately 625 ARB for eligible users and a per-address cap.

Aptos (APT, 2022) retroactively rewarded testnet activity, including minting of the “Aptos Zero” NFT. Certain testnet users received approximately 150 APT, representing substantial USD value at listing.

ENS (ENS, 2021) combined a retroactive airdrop with a governance grant, basing eligibility on historical .eth domain registrations and duration of holding. The allocation formula incorporated registration length and domain name, and the claiming process was coupled with voting on the ENS Constitution to launch the DAO.

dYdX (DYDX, 2021) conducted a retroactive airdrop based on historical trading volume on the dYdX platform before the cutoff date. Tiered volume thresholds were employed. The total airdrop value temporarily exceeded $2 billion, with certain users receiving equivalent to over $100,000.

Blur (BLUR, 2023) retroactively rewarded NFT trading and listing activity on the Blur platform relative to competitors. The program encompassed multiple seasons with volume-weighted rewards for active NFT traders.

These cases popularized the “user as early investor” narrative and profoundly influenced current expectations that major DeFi and L2 launches will incorporate a retroactive drop component.\

 

II. Legal Framework for Virtual Currency Taxation in Poland

A. Definition of Virtual Currency

For tax purposes, virtual currency is defined in Article 2(2)(26) of the Act on Anti-Money Laundering and Counter-Terrorism Financing (ustawa o przeciwdziałaniu praniu pieniędzy oraz finansowaniu terroryzmu). Virtual currency comprises a digital representation of value that does not constitute legal tender, electronic money, a financial instrument, a bill of exchange, or a check, yet is exchangeable in commercial transactions for legal tender and accepted as a medium of exchange.

Both the Personal Income Tax Act (ustawa o podatku dochodowym od osób fizycznych, hereinafter “PIT Act”) in Article 5a(33a) and the Corporate Income Tax Act (ustawa o podatku dochodowym od osób prawnych, hereinafter “CIT Act”) in Article 4a(22a) incorporate this definition by reference.

 

B. Timing of Income Recognition: General Principles

Central to understanding the taxation of genesis allocation are the statutory provisions governing when income from virtual currencies arises.

For natural persons, Article 17(1)(11) in conjunction with paragraph 1f of the PIT Act provides that income from capital gains includes income from the disposal for consideration of virtual currency, where disposal for consideration means the exchange of virtual currency for legal tender, goods, services, or property rights other than virtual currency, or the settlement of other obligations using virtual currency.

Analogously for legal persons, Article 7b(1)(6)(f) of the CIT Act classifies income from the exchange of virtual currency for legal tender, goods, services, or property rights other than virtual currency, or from the settlement of other obligations using virtual currency, as income from capital gains.

Both statutes contain a significant exclusion: income does not include the value of virtual currency received in exchange for another virtual currency (Article 21(1)(149) of the PIT Act and Article 12(4)(27) of the CIT Act).

 

III. The KIS Interpretive Line: Landmark Rulings

A. The Ruling of May 27, 2024 (0111-KDIB1-1.4010.128.2024.2.MF)

This ruling represents a turning point in the tax authorities’ approach to genesis allocation. The applicant—a company that was a Polish tax resident—was contemplating the provision of legal services to a counterparty engaged in creating and developing blockchain networks. Independent of monetary remuneration for these services, the company was to receive tokens created in connection with the genesis allocation.

The key elements of the factual circumstances presented in the application indicated that genesis allocation involves the transfer of tokens created in connection with the creation of the genesis block of a given cryptocurrency. The genesis block serves as the root of the blockchain from which all subsequent blocks derive. It cannot be modified or deleted, as doing so would invalidate the entire chain. At the stage of receiving tokens through genesis allocation, no other units of this cryptocurrency yet exist whose market value could be estimated based on their prices on virtual currency exchanges.

The applicant further argued that the transfer of tokens does not constitute a donation within the meaning of Article 888 of the Civil Code, as it is not an “act of generosity” (akt szczodrobliwości) on the part of the transferor—the actions of all involved entities are directed toward obtaining an economic equivalent. The distribution of tokens is a necessary element for initiating a new blockchain.

The KIS Director found the applicant’s position correct, stating unequivocally that the mere receipt of virtual currency does not give rise to taxable income. Such income will arise only at the moment of exchange of virtual currency for legal tender, goods, services, or property rights other than virtual currency, or from the settlement of other obligations using virtual currency, “because only then will the currency have its value definitively determined.”

 

B. The Ruling of October 10, 2025 (0115-KDIT1.4011.558.2025.2.MK)

This ruling extends the prior interpretive line to the case of natural persons conducting business activity, while simultaneously introducing a significant distinction concerning airdrops and retroactive grants.

The factual circumstances concerned a programmer—a Polish tax resident conducting sole proprietorship activity in software development, taxed under the lump-sum regime on recorded revenues. The taxpayer received token airdrops from various entities (a foundation from Liechtenstein, entities from the Cayman Islands) in connection with past involvement in the development of open-source blockchain projects. No service agreements bound him to these entities, and the quantity of tokens awarded was not strictly correlated with the value of work performed.

Additionally, the taxpayer received retroactive grants (RPGF—Retroactive Public Goods Funding) awarded through community plebiscite for contributions to blockchain technology development.

The KIS Director adopted a position contrary to that anticipated by the applicant, holding that at the moment of receiving airdrops or retroactive grants, taxable income arises. The authority classified these receipts as income from property rights pursuant to Article 18 of the PIT Act, reasoning that since virtual currencies are recognized as property rights, their receipt generates taxable income.

Simultaneously, the authority confirmed two elements favorable to taxpayers. The value of income recognized at the moment of receiving virtual currencies simultaneously constitutes the acquisition cost of those currencies pursuant to Article 22(1d)(1) of the PIT Act, thereby eliminating the risk of double taxation. Furthermore, market value may be established as the average exchange rate of the given virtual currency against the dollar on the day of receipt, subsequently converted to Polish zloty according to the average NBP exchange rate from the last business day preceding the day of income receipt.

 

C. The Judgment of the Provincial Administrative Court in Kraków of July 25, 2024 (I SA/Kr 492/24)

This judgment bears fundamental significance for the practice of applying for rulings in matters concerning genesis allocation. The court annulled the KIS Director’s decision to leave an application without consideration, articulating important procedural principles.

The applicant posed three questions: whether income from genesis allocation arises only upon disposal for consideration of the tokens, whether receiving tokens gives rise to an obligation under the inheritance and gift tax, and how to determine any tax base under that tax.

The authority requested the applicant to supplement the description of factual circumstances by indicating under which title from Article 1(1) of the Inheritance and Gift Tax Act the receipt of tokens would occur, as well as whether the tokens would have market value and whether they could be valued.

The court found such a request impermissible, articulating in its holding the principle that a request to clarify an application through supplementation of the factual description “cannot shift to the applicant the burden of determining the key issue in the case.”

In its reasoning, the court indicated that the applicant had comprehensively described the mechanism of genesis allocation and the title to receipt of the tokens. The question of whether the event falls within the catalog of transactions subject to inheritance and gift tax constitutes the essence of the applicant’s uncertainty and cannot be shifted by the authority onto the taxpayer under the guise of clarifying the factual circumstances.

 

IV. Distinguishing Token Allocation Types in Tax Practice

Analysis of the cited rulings permits identification of three categories of situations, each leading to distinct tax consequences. Critical to this analysis is precise understanding of the factual circumstances underlying the respective interpretations.

A. Genesis Allocation Stricto Sensu

This category encompasses the initial allocation of tokens created contemporaneously with the creation of the genesis block of a new blockchain network. It is characterized by the impossibility of establishing market value at the moment of allocation, as no market for trading these tokens yet exists—as the applicant stated in ruling 0111-KDIB1-1.4010.128.2024.2.MF: “at the stage of receiving tokens through genesis allocation, no other units of this cryptocurrency yet exist whose market value could be estimated based on their prices on virtual currency exchanges.”

A significant element of the factual circumstances in this interpretation was also that the transfer of tokens occurred “independent of Remuneration” for rendered legal services and “was not connected with the necessity of performing any services” for the transferor. The authority confirmed that in such circumstances, income arises only upon disposal for consideration of the tokens, “because only then will the currency have its value definitively determined.”

 

B. Airdrops and Retroactive Grants

In ruling 0115-KDIT1.4011.558.2025.2.MK, the authority adopted a different position regarding airdrops and retroactive grants received by a programmer for earlier involvement in the development of blockchain projects. The critical distinction from genesis allocation stricto sensu lay in the fact that the received tokens already possessed established market value—a functioning market existed on which they were quoted and exchanged.

The authority classified these receipts as income from property rights pursuant to Article 18 of the PIT Act, stating: “Since under the Personal Income Tax Act virtual currencies are recognized as property rights, at the moment of receiving airdrops or retroactive grants, income from property rights arises on your part.” Income thus arises at the moment of receiving the tokens, and its value simultaneously constitutes the acquisition cost upon subsequent disposal, which eliminates the risk of double taxation of the same economic value.

It is worth noting that the applicant in this matter invoked judicial precedent concerning stock options and staking, arguing for deferral of the moment of income recognition until disposal. The authority did not address this argumentation in detail in the ruling’s reasoning, which may constitute grounds for appeal.

 

C. Tokens as Compensation for Services

When tokens constitute direct compensation for specified services rendered to an issuer or counterparty, the general principles of taxation of business income apply. Income arises at the moment of service performance (or invoice issuance, or payment receipt—whichever occurs first), and its value is established according to the market value of the tokens received. This category was not the direct subject of the analyzed interpretations but derives from the general principles of recognizing income in kind.

 

D. Systemic Observations Regarding Abuse Risk

In evaluating the presented interpretive line, it is appropriate to consider the systemic perspective that individual interpretations, by their nature, do not encompass. Tax law institutions require examination not only of their conformity with the letter of the law but also of their susceptibility to abuse and circumvention.

Acceptance that airdrops of tokens possessing market value do not generate income at the moment of receipt (a position rejected by the authority in the October 2025 ruling but advocated by some taxpayers and finding support in certain judicial decisions concerning staking) would open significant scope for aggressive tax optimization. The airdrop mechanism could be utilized to tokenize economic events that in traditional form would generate immediate income—compensation, bonuses, commissions, or benefits in kind could be “packaged” in the form of airdrops linked to the beneficiary’s prior activity, resulting in deferral of the moment of taxation until disposal of the tokens, and in the case of their exchange for other virtual currencies—potentially indefinite deferral of the tax obligation.

The October 2025 ruling, classifying airdrops as income from property rights arising at the moment of receipt, may be viewed as an attempt to close this gap—although the authority did not expressly articulate this systemic justification, concentrating on statutory interpretation. At the same time, this position is not free from doubt, particularly in light of jurisprudence concerning financial instruments and staking rewards that emphasizes the requirement of definitiveness of accretion as a condition for income recognition.

Practice demonstrates that the boundary between a “reward for prior involvement” (airdrop) and “compensation for services” (business income) is often fluid and depends largely on how the transaction is documented and communicated by the parties. This circumstance should counsel both taxpayers and tax authorities toward particular caution in classifying specific factual circumstances.

 

V. International Context

A. OECD Crypto-Asset Reporting Framework (CARF)

The Organisation for Economic Co-operation and Development introduced the Crypto-Asset Reporting Framework in October 2022, constituting the most significant international coordination to date in cryptocurrency taxation. CARF extends the Common Reporting Standard (CRS) model—which requires financial institutions to report information about foreign accounts—to digital assets.

The framework becomes operative for tax year 2026 in implementing jurisdictions, with 48 countries having declared adoption of the standard as of November 2023. Automatic exchange of information between tax authorities will commence in 2027 for transactions from calendar year 2026.

In contrast to the CRS approach based on account balances, CARF requires transaction-level reporting by Crypto-Asset Service Providers (CASPs)—a broad category encompassing exchanges, custodians, brokers, and potentially certain operators of decentralized finance (DeFi) protocols. CASPs must report user identification and tax residency verification for all account holders, gross proceeds from crypto-asset disposals, exchange transactions between crypto-assets and fiat currencies, retail payment transactions exceeding specified thresholds, and income from staking, lending, and similar crypto-asset-related services.

The framework’s effectiveness remains contested following the 2022 cryptocurrency market collapse and high-profile exchange failures. Researchers indicate that the collapse of FTX and other exchanges may undermine assumptions underlying CARF, and that countries not adopting CARF may become havens for tax avoidance and illicit finance. Moreover, CARF’s dependence on centralized intermediaries creates enforcement gaps in DeFi ecosystems, where peer-to-peer transactions occur without CASP involvement.

The “sunrise problem” affects CARF implementation: existing cryptocurrency holdings from before reporting requirements remain undetected, and migration from centralized exchanges to self-custody wallets or DeFi protocols enables continued tax avoidance.

For genesis allocation, CARF means that even if the initial allocation does not generate income at the moment of receipt, subsequent disposal of tokens will be subject to reporting and potential information exchange between tax authorities of different states.

 

B. MiCA Regulation in the European Union

The European Union is implementing parallel regulatory and tax frameworks for crypto-assets through the Markets in Crypto-Assets Regulation (MiCA) and the eighth Directive on Administrative Cooperation (DAC8). DAC8 implements CARF standards within the EU legal framework, requiring Member States to automatically exchange information about crypto-asset transactions.

MiCA, adopted in 2023, establishes comprehensive regulation for crypto-asset issuers and service providers throughout the EU. The regulation requires disclosures in white papers covering tokenomics, allocation structures, and rights granted to token holders. Researchers have even developed NLP tools for automatic analysis of white paper compliance with MiCA requirements. These documentation requirements directly affect tax compliance, creating auditable documentation of token distributions.

MiCA categorizes crypto-assets into three types with different regulatory treatment: asset-referenced tokens (stablecoins backed by assets or currencies), e-money tokens (stablecoins representing legal tender), and utility tokens (other crypto-assets not qualifying as securities). This classification scheme affects tax characterization, as asset-referenced tokens may receive different treatment than utility tokens under Member States’ national tax law.

DAC8 references MiCA definitions, creating interdependence between regulatory compliance and tax reporting. The high interdependence between DAC8, MiCA, and CARF creates both synergies and complexities—entities subject to MiCA authorization automatically become subject to DAC8 reporting obligations, but definitional divergences between frameworks may create gaps or overlaps.

 

C. FATF Standards for Virtual Assets

The Financial Action Task Force has established standards for Virtual Asset Service Providers (VASPs) focused primarily on anti-money laundering (AML) and counter-terrorism financing (CFT), with significant implications for tax enforcement. Research on Travel Rule compliance methodologies indicates the complexity of implementing these requirements.

FATF Travel Rule requirements oblige VASPs to obtain, maintain, and transmit information about originators and beneficiaries of virtual asset transfers, similarly to requirements for wire transfers in traditional finance. Although the Travel Rule is primarily an AML measure, the data it generates creates potential tax enforcement infrastructure.

Implementation has proven challenging due to technical complexity, jurisdictional differences, and the decentralized nature of virtual asset networks. Proposed blockchain-based solutions aim to enable Travel Rule compliance while preserving privacy, simultaneously creating audit trails for tax authorities.

Emerging regulatory theory conceptualizes “platform-embedded enforcement”, where compliance mechanisms are integrated directly into exchange and protocol architectures, enabling real-time, automated, cross-jurisdictional enforcement. This approach could transform taxation of token allocations, making distributions automatically reportable at the smart contract level.

 

D. United States Approach

The Internal Revenue Service has provided guidance on cryptocurrency taxation since 2014, although significant gaps remain regarding genesis allocation and novel token distribution mechanisms. The new tax reporting regime in the USA introduces additional requirements for digital assets.

IRS Notice 2014-21 established that virtual currency is treated as property for federal tax purposes, not as currency. This characterization requires recognition of gain or loss upon each disposal, with character (ordinary vs. capital) depending on the taxpayer’s relationship to the asset.

Taxation of newly created tokens constitutes the most contested area of American cryptocurrency tax law. Informal IRS guidance suggests that block rewards from mining constitute immediate ordinary income at fair market value upon receipt. Leading tax law scholars argue, however, that newly created property—whether cattle, crops, or cryptocurrency tokens—has never constituted income under American tax law until sale or exchange. Creation or discovery of property by a taxpayer does not generate income; only receipt of property as payment or compensation creates a taxable event.

Applied to genesis allocation, this theory would defer taxation of founder and team tokens until disposal, treating token creation analogously to creation of a patent or copyright. The taxpayer’s cost basis would be zero (for self-created property) or the equivalent of expenses incurred for development.

Revenue Ruling 2019-24 addressed cryptocurrency hard forks, establishing that new tokens received from a fork constitute ordinary income when the taxpayer acquires dominion and control. This ruling suggests that airdrop tokens from genesis distributions would be taxed upon receipt at fair market value. However, application of the ruling to genesis allocation remains unclear—if tokens are subject to smart contract-enforced vesting, when does “dominion and control” arise: upon token creation, upon vesting, or upon transferability?

 

E. Other European Jurisdictions’ Approaches

Germany offers a favorable regime in which cryptocurrency held for longer than one year is exempt from capital gains taxation. This creates incentives for long-term holding of genesis allocation by team members and investors. For genesis allocation, the holding period likely commences upon vesting, not upon grant for locked tokens, deferring the start of the one-year exemption clock.

The United Kingdom through HMRC provides detailed guidance on crypto-asset taxation, distinguishing between mining, exchange trading, investing, and receipt as employment income. HMRC guidance addresses both hard forks and airdrops, treating new tokens as income at fair market value upon receipt. This approach would apply to genesis allocation airdrops distributed to community participants. HMRC distinguishes between tokens received as compensation for work (subject to income tax and National Insurance) and tokens acquired as investments (subject to capital gains tax). Genesis allocation for team members would likely constitute employment income unless structured as equity-like instruments.

 

F. Asian Jurisdictions’ Approaches

Japan’s National Tax Agency treats income from NFT and token issuance as miscellaneous income or business income depending on the scale of the taxpayer’s activity. For secondary transfers where rights are transferred, transfer income or business income applies. This framework would characterize genesis allocation for founders as business or miscellaneous income at fair market value. The challenge lies in valuation when no market exists at token creation.

Inland Revenue Authority of Singapore generally does not tax capital gains, creating favorable treatment for long-term token holders. However, tokens received as business or employment income are taxed as ordinary income. Genesis allocation structured as equity-like investments would avoid taxation until conversion to fiat or use in taxable transactions.

Australia through the Australian Taxation Office has developed detailed cryptocurrency taxation guidance, treating crypto-assets as property subject to capital gains tax. Employment income and business income from crypto-assets are subject to ordinary income taxation. Australia’s approach to genesis allocation would likely follow the compensation vs. investment distinction, with vesting schedules potentially triggering taxable events at each vesting milestone.

 

G. Canada’s Approach

Canada Revenue Agency treats crypto-assets as commodities, not currency, for tax purposes. This characterization subjects cryptocurrency transactions to income or capital gains treatment depending on whether the taxpayer conducts business activity. The emergence of “crypto contracts”—securities representing claims to crypto-assets held by exchanges rather than direct ownership—adds complexity. Genesis allocation could be structured as crypto contracts, potentially receiving different tax treatment than direct token ownership.

 

H. Staking Taxation: A Comparative Perspective

Although staking differs from genesis allocation, taxation of staking rewards illustrates broader principles applied to token distributions. Critical evaluation of staking taxation in selected countries indicates significant divergences between jurisdictions.

Many jurisdictions tax staking rewards as ordinary income upon receipt at fair market value. This approach treats staking analogously to interest income, where validators provide capital (staked tokens) and receive returns (staking rewards).

Scholars argue that taxation should reflect the technological substance of staking, not revenue maximization policy. From this perspective, staking rewards constitute self-created property, analogously to block rewards in proof-of-work mining. Direct staking (operating validator nodes) differs from indirect staking (delegating tokens to validators), where the former more clearly involves property creation while the latter resembles lending.

Economic analysis reveals that staking rewards may not constitute “income” in the traditional sense when all or most token holders receive proportionate distributions. Universal staking rewards resemble stock splits, maintaining proportionate ownership without creating new value.

 

VI. Inheritance and Gift Tax Considerations

A. The Legal Qualification Problem

Can genesis allocation constitute a donation within the meaning of Article 888 of the Civil Code? Under this provision, through a donation agreement the donor undertakes to provide a gratuitous benefit to the donee at the expense of the donor’s own assets.

In doctrine and jurisprudence, it is emphasized that a donation is an “act of generosity” devoid of economic equivalent. Meanwhile, genesis allocation has a functional character—distribution of tokens is necessary to launch a blockchain network. Without this step, the project could not come into existence, and the issuer would not achieve any economic objectives.

 

B. The Kraków Provincial Administrative Court’s Position

In judgment I SA/Kr 492/24, the court did not conclusively determine the question of qualifying genesis allocation for inheritance and gift tax purposes, but clearly indicated that it is the interpretive authority—not the applicant—that should assess whether a given event falls within the catalog of transactions subject to this tax.

 

C. Practical Consequences

If genesis allocation is not qualified as a donation or another title under Article 1(1) of the Inheritance and Gift Tax Act, no tax obligation will arise under this tax. At the same time, upon subsequent disposal of the tokens for consideration, the taxpayer will not be able to recognize acquisition cost (gratuitous acquisition means no expenditure on acquisition), resulting in 19% taxation on the full sale price.

If, however, genesis allocation is qualified as a donation, an inheritance and gift tax obligation will arise. The problem remains, however, of establishing the tax base—the market value of tokens for which no market exists at the moment of genesis.

 

VII. Token Valuation: Practical Aspects

A. The Problem of Market Absence

The fundamental difficulty with genesis allocation is the impossibility of establishing the market value of tokens at the moment of their allocation. No comparable transactions exist, no exchange operates on which the tokens are listed.

The KIS Director in the ruling concerning the company accepted that precisely for this reason income does not arise at the moment of genesis—only upon exchange will the currency have its value definitively determined.

Cryptocurrency valuation methodologies adapted from traditional finance provide theoretical frameworks but lack credibility at genesis. Application of the quantity theory of money (exchange equation MV = PQ) to tokens suggests that value equals transaction volume divided by velocity and token supply—at genesis, transaction volume is zero, yielding zero value. Network value models based on network effects value networks proportionally to the square of user count or similar functions—at launch, user bases are minimal, again suggesting low or zero value.

 

B. Valuation Methodology for Airdrops

In the case of airdrops and retroactive grants, where tokens already have established market value, ruling 0115-KDIT1.4011.558.2025.2.MK accepts the following methodology: establishing the average exchange rate of the given virtual currency against the dollar on the day of receipt, then converting to Polish zloty according to the average NBP exchange rate from the last business day preceding the day of income receipt.

This approach corresponds to market practice, where most virtual currencies are valued primarily against the U.S. dollar.

 

VIII. Practical Recommendations

A. For Genesis Allocation Participants

When applying for an individual ruling, the mechanism of genesis allocation should be precisely described, indicating that tokens arise contemporaneously with creation of the genesis block and at that moment no market exists permitting their valuation.

It is essential to clearly specify the legal title of token acquisition. If allocation occurs in connection with rendering services to the issuer or counterparty, it should be indicated whether the tokens constitute compensation for those services (in which case income arises at the moment of service performance) or are a benefit independent of monetary remuneration.

Consideration should be given to argumentation concerning the absence of donation character—genesis allocation constitutes a necessary element for launching the network, is not an act of generosity, and all parties act to achieve economic benefits.

 

B. For Founders and Development Teams

Tokens allocated to founders and developers often are subject to vesting periods (gradual unlocking). From a tax perspective, it is critical to establish when “receipt” of tokens occurs—at the moment of genesis or only after expiration of the lock-up period.

It may be argued that tokens locked technically and contractually (without possibility of disposal or encumbrance) do not yet give the holder “dominion and control” required for income recognition. Similar reasoning is adopted in jurisprudence concerning shares subject to incentive programs with vesting periods.

 

C. For Investors Participating in Private Rounds

Investors acquiring tokens in pre-seed, seed, or private rounds before genesis should document expenditures incurred for acquisition. These constitute acquisition cost upon subsequent disposal for consideration.

If acquisition occurs under a SAFT (Simple Agreement for Future Tokens), the moment of tax obligation should be established—whether it is conclusion of the SAFT agreement or only actual receipt of tokens after fulfillment of contractual conditions. Conceptual frameworks for venture business development in the context of digital transformation indicate the growing significance of SAFTs in financing blockchain projects. Development of contract law norms in the blockchain technology sphere confirms that SAFT agreements constitute an important instrument in the crypto-asset ecosystem.

 

Conclusion

The KIS Director’s interpretive line in matters concerning genesis allocation is evolving, but its main direction can already be identified: in classic genesis allocation of new tokens, without possibility of establishing market value at the moment of allocation, taxable income arises only upon disposal for consideration.

Different rules apply to airdrops and retroactive grants, where tokens already have established market value—income arises at the moment of receipt, but its value simultaneously constitutes acquisition cost, eliminating the risk of double taxation.

The question of qualifying genesis allocation for inheritance and gift tax purposes remains open. The Kraków Provincial Administrative Court indicated that the tax authority should make this assessment independently, not shifting the burden onto the applicant.

In the international context, CARF implementation from 2026 will increase transparency of crypto-asset transactions, and MiCA regulation introduces documentation requirements concerning token allocation structures. FATF standards for virtual assets create an additional layer of compliance requirements that, although focused on AML/CFT, will have significant implications for tax enforcement. Different jurisdictions adopt varying approaches—from favorable German and Singaporean regimes, through rigorous HMRC positions, to ongoing doctrinal debate in the United States concerning treatment of newly created tokens as “self-created property.”

Taxpayers should consider these regulations in tax structure planning and transaction documentation, particularly in the context of growing international tax information exchange.

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This Article presents the legal and interpretive status as of February 2026. Each case requires individual analysis considering specific factual circumstances. Obtaining professional legal advice before making tax decisions is recommended.