Inheritances and gifts in Poland

Inheritance and gift tax in Poland depends on several factors:

- Location of the assets: If you receive assets located in Poland, they are always taxable in Poland

- our residence and nationality: If you are a Polish citizen or have a permanent residence in Poland, any property you receive is taxable, regardless of where it is located

It should be remembered that taxation does not always mean that you have to pay tax. You can take advantage of various tax exemptions, for example in the case of gifts to your immediate family, which may be exempt from tax.

The amount of tax you have to pay on an inheritance or gift in Poland depends mainly on how closely related you are to the person transferring the property to you. This depends on your tax class:

- Group I : Your immediate family: spouse, parents, children, siblings, parents-in-law, sons-in-law, daughters-in-law, stepchildren, stepfathers and stepmothers. The tax rates here are between 3 % and 7 % of the value of the assets.

- Group II - extended family: grandchildren of siblings, siblings of your parents, relatives of stepchildren, spouses of your siblings and siblings of your spouse. In this group, the rates are between 7% and 12%

- Group III - All others who are not closely related to you. The tax rate here is between 12% and 20%.

In certain cases, it is possible to obtain full tax exemption.

In Poland, there are tax allowances that allow you to receive a certain value of property without having to pay inheritance and gift tax. These amounts depend on your relationship to the person transferring the property to you:

- Group I (your immediate family): You can receive up to PLN 36 120 tax-free.

- Group II (large family circle): The tax-free amount is PLN 27 090.

- Group III (all others): Here the tax-free amount is PLN 5,733

Remember that these amounts are calculated as the sum of the value of all assets received from the same person in the last five years. So if you have received property from someone in the past, the value of these gifts will affect how much more you can receive tax-free.

If you have received an inheritance in Germany and live permanently in Poland, you may have to submit a tax return in both countries. You have already paid inheritance tax in Germany. Please note, however, that Polish law does not provide for automatic deduction of this tax from your tax liabilities in Poland.

Poland has concluded agreements with some countries (Austria, Hungary, Czech Republic) that allow the deduction of inheritance and gift tax paid in order to avoid double taxation. Unfortunately, such an agreement does not apply to relations between Poland and Germany.

If no tax exemptions apply, you may therefore have to pay tax on the same inheritance in both Germany and Poland.

If you receive an inheritance, you can reduce your taxable amount by taking into account certain costs associated with the inheritance. Here is the most important information:

Medical and care costs for the deceased: If these expenses were not paid out of the deceased's assets during his or her lifetime, you can deduct them

Funeral expenses of the deceased: This includes the costs of the funeral, including the headstone, up to the amount considered customary in your community, unless they were paid from the assets of the deceased or the death benefit.

Inheritance costs: In this area you can deduct the court costs, the remuneration of the executor and the costs in connection with the settlement of testamentary bequests.

Payments based on a reserved share: If someone was entitled to a reserved share and was not mentioned in the will, these payments can also reduce the taxable amount.

Other obligations: These relate to various inheritance-related expenses as defined in the Polish Civil Code.

If you are part of your immediate family - spouse, children, parents, stepson, siblings, stepfather, stepmother - you have the opportunity to benefit from a full exemption from inheritance and gift tax. To do so, you must fulfil certain conditions:

If you acquire property or property rights , you are obliged to report this to the head of the tax office on the appropriate form within six months of the tax liability arising.

In the case of the acquisition of assets by inheritance , the notification must be made within 6 months of the court decision on the acquisition of the inheritance becoming final.

If the deadline is not met, the tax exemption is lost and the tax must be paid in full. It is therefore important not to miss these important deadlines.

The European Certificate of Succession is a document recognised in most countries of the European Union that facilitates inheritance procedures by confirming the legal entitlement to the inheritance.

Although this document can be useful to prove inheritance rights in various EU countries, it is not required for the payment of inheritance tax in Poland. Polish tax law does not require any special documents such as the European Certificate of Inheritance in order to pay inheritance tax on an inheritance from abroad.

Several conditions must be met for the daughter to be able to claim the tax exemption in Poland:

Reporting the gift: You must report the gift to the head of the relevant tax office within 6 months of making the gift;

Documenting the transaction: It is very important to document the gift by transferring the money to the daughter's bank account. It is also possible to use a postal order as proof of the money transfer.

A gift in the form of cash without proper proof of the transfer is not eligible for tax exemption. To avoid the tax liability and claim the tax exemption, it is best to make a transfer directly to the daughter's bank account.