POLAND Law and Practice Contributed by: Wiesław Oleś, Krzysztof Rysz, Joanna Sarkowicz and Kamil Kania, Oleś, Rysz, Sarkowicz
be concluded. Therefore, comprehensive planning requires co-ordinating marital property agreements with specific testamentary and renunciation instru- ments.
• Third tax group: All other acquirers. Tax Exemption for Immediate Family Members Receiving a gift from a spouse, descendant, ances- tor, stepchild, sibling, stepfather or stepmother is tax- exempt regardless of the value of the acquired items or property rights (so-called Group 0). However, to benefit from this exemption, the recipient must report the acquisition to tax authorities within six months of the date the gift was received. Failure to comply with these conditions, particularly missing the six-month deadline, will result in the gift being taxed according to the rules applicable to first tax group. Tax-Free Allowance The assignment to specific tax groups is significant in determining the amount of the tax-free allowance. The amount of tax due is calculated based on the tax base (the market value of the gifted item after deducting debts and encumbrances) in excess of the tax-free amount, which is: • PLN36,120 – if the recipient is a person assigned to the first tax group; • PLN27,090 – if the recipient is a person assigned to the second tax group; and • PLN5,733 – if the recipient is a person assigned to the third tax group. When assessing whether these thresholds have been exceeded, the total value of all assets received from the same donor during the current year and the previ- ous five years shall be taken into account. 5.2 Testamentary Dispositions General Rules Most of the rules applicable to taxation of gifts also apply to inheritances, as both are governed by the same legal framework under the Act on Inheritance and Gift Tax. In particular, this applies to classification of family members and others into tax groups, the possibility of tax exemption for close family members (so-called Group 0) provided that the acquisition of inheritance is duly reported to the tax authorities and rules for valuation of assets.
5. Tax Treatment of Lifetime Transfers and Testamentary Dispositions
5.1 Lifetime Transfers Gift and Inheritance Tax
Acquisition by an individual of ownership of property located on the territory of Poland, or of rights exer- cised in Poland, by way of gift, is generally subject to gift and inheritance tax. The scope of this tax also covers the acquisition of movable property located abroad or property rights exercised abroad, provided that at the time the gift agreement was concluded, the recipient was a Polish citizen or had their perma- nent residence in the territory of the Poland. Inherit- ance and gift tax is payable by individuals who have acquired assets through inheritance or donation. General Principles Taxation depends primarily on the degree of kinship between the donor and the recipient (tax groups indi- cated below), the value of the gifted asset, and any previous acquisitions received from the same person. In certain cases, taxation depends on fulfilling formali- ties related to notifying tax authorities of the received gift. Failing to report a gift within the six-month statu- tory deadline can result in the loss of full tax exemp- tions for immediate family members. Tax Rates Tax rates range from 3% to 20% and depend on the tax group to which the recipient belongs, which is determined by the degree of kinship between the donor and the recipient. • First tax group: A spouse, descendants, ances- tors, stepchildren, sons-in-law, daughters-in-law, siblings, stepfather, stepmother and parents-in-law. • Second tax group: Descendants of siblings, siblings of parents, descendants and spouses of stepchildren, spouses of siblings and siblings of spouses, spouses of the siblings of spouses, and spouses of other descendants.
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