In Polish law, all issues regulating obligations and exemptions from paying taxes on inheritance and donations are regulated by the Act of July 28, 1983 on inheritance and donation tax (hereinafter referred to as the Act).
Tax exemptions are regulated by Article 4a of the Act, pursuant to which the above-mentioned tax acquisition of property or property rights by a spouse, descendants (children, grandchildren and further), ascendants (parents, grandparents and further), stepson, siblings, stepfather and stepmother. However, in order to be able to take advantage of the privilege, it is necessary to meet the requirements specified in Art. 4a paragraph. 1 conditions, namely:
- the acquisition of property or property rights should be reported to the competent head of the tax office within 6 months from the date of the tax obligation, and in the case of acquisition by inheritance – within 6 months from the date on which the court ruling confirming the acquisition of the inheritance becomes final. At this point, it is worth quoting the most recent judgment of the Provincial Administrative Court of July 27, 2021 (file reference number I SA / Go 168/21), which refers to the six-month deadline for reporting in a pandemic situation. The court decided that Art. 15zzr paragraph. 1 of the COVID-19 Counteracting Act applies to regulations contained in administrative law in a broad sense, and therefore to tax law, including Art. 4a paragraph. 1 point 1 of the Act. Pursuant to the cited provision of the covid act, the legislator suspends the running of time limits for the duration of the epidemic threat or state of the epidemic. Therefore, in the current situation, the 6-month period is extended.
- If the subject of the acquisition by way of a donation or order of the donor is cash, and the value of the property acquired jointly from the same person in the period of 5 years preceding the year in which the last acquisition took place, added to the value of recently acquired property and property rights, exceeds the amount 9637 zlotys. This amount should be documented with a proof of transfer to the buyer’s payment account, on his account, other than a payment account, at a bank or a savings and credit union, or by a postal order.
The consequence of failure to report the acquisition of an inheritance or a donation on the indicated date to the competent tax office results in taxation of activities in accordance with the rules specified for buyers included in tax group I
The legislator also provides for situations in which the entity learns about the acquisition of property or property rights after the expiry of the indicated period. In this case, the principles set out in point 3 shall apply if the buyer reports these items or property rights to the head of the tax office not later than within 6 months from the date on which he learned about their purchase, and makes it plausible that he later becomes aware of their purchase.
The obligation to notify does not apply to cases where the acquisition takes place on the basis of an agreement concluded in the form of a notarial deed or in this form a declaration of intent of one of the parties has been submitted.
To sum up, in order to take advantage of the exemption from inheritance and donation tax, two conditions must be met: be in the circle of eligible persons and report the acquisition of property or property rights to the competent head of the tax office within 6 months from the date of the tax obligation.