Inheritance tax in Poland

Inheritance tax

The acquisition of an inheritance involves not only benefits but also formalities and obligations. Some of them include reporting the inheritance acquisition to a tax office.

In Poland, inheritance and donation tax is still in force. It must be paid both in the case of testate and intestate succession. Inheritance tax is also imposed on a forced share.

Inheritance tax exemptions for close family members

The deceased’s close family members: spouse, descendants, ascendants, stepchild, siblings, stepfather, stepmother – belonging to the so called “zero tax group”  are fully exempt from an inheritance and donation tax. However, if a tax allowance of PLN 9637 is exceeded, the exemption applies provided that the acquisition of an inheritance is reported to a tax office in due time.

Inheritance tax allowance

Importantly, if the value of an inheritance does not exceed a tax allowance, no tax obligation applies. The amount of a tax allowance depends on a tax group to which an heir belongs. Tax exemption applies to the acquisition of an inheritance worth:

  • PLN 9,637 for persons belonging to the 1st tax group,
  • PLN 7,276 for persons belonging to the 2nd tax group,
  • PLN 4,902 for persons belonging to the 3rd tax group.

Inheritance tax groups

I inheritance tax group spouse, descendants (children, grandchildren), ascendants (parents, grandparents), stepchild, son-in-law, daughter-in-law, siblings, stepfather, stepmother and in-laws;
II inheritance tax group descendants of siblings (niece, nephew), siblings of parents (uncles, aunts), descendants and spouses of stepchildren, spouses of siblings and siblings of spouses, spouses of siblings of spouses, spouses of other descendants;
III inheritance tax  group other persons, e.g., friends, strangers.

If the value of the estate acquired by an heir is lower than or equal to a tax allowance, they do not have perform any formalities associated with reporting the estate to a tax office. Otherwise, the acquisition must be reported.

Inheritance tax amount

For people in the 1st, 2nd and 3rd tax groups, an inheritance tax is calculated by multiplying the value of the inheritance (after deducting the tax allowance) by a certain inheritance tax rate.

In the case of an inheritance of a more significant value, a fixed fee, independent of the value of the inheritance, is added. The higher the value of an inheritance, the higher the percentage, but at the same time, the closer the relationship, the lower the tax rate.

An inheritance tax amounts to:

  • up to PLN 10,278:
    • 3% in the 1st tax group,
    • 7% in the 2nd tax group, and
    • 12% in the 3rd tax group;
  • from PLN 10,278 to PLN 20,556:
    • PLN 308.30 + 5% surplus over PLN 10,278 in the 1st group,
    • PLN 719.50 + 9% surplus in the 2nd group,
    • PLN 1,233.40 + 16% surplus in the 3rd group;
  • above PLN 20,556:
    • PLN 822.20 + 7 % surplus over PLN 20,556 in the 1st group,
    • PLN 1,644.50 + 12% surplus in the 2nd group,
    • PLN 2,977.90 + 20% surplus in the 3rd group.

Inheritance tax rate in Poland

Detailed tax calculation rules are provided above. As a simplification – you may assume that the inheritance tax rates for succession of estate valued more than PLN 20,556 would be the following:

7% I inheritance tax group
12 % II inheritance tax group
20% II inheritance tax group

Tax obligations associated with inheritance acquisition

In the case of succession between immediate family members, the application of tax exemption is conditional on the filing of form SD-Z2 with a tax office within 6 months of receiving the inheritance. In other cases, the heirs have one month after a tax obligation arises to submit form SD-Z3 for the purpose of tax calculation. After receiving the decision, the tax should be paid no later than after 14 days.

It should be kept in mind that a tax obligation arises from the moment when the court’s ascertainment of the acquisition of an inheritance becomes final and non-appealable or a notarial certificate of inheritance is registered by a notary, which usually takes place within 1-6 months.

Consequences of not meeting a tax obligation within the prescribed period

If an inheritance tax is not paid on time and a tax office becomes aware of it, an heir can expect that after the case is examined, they will be requested to pay the entire tax due, together with default interest.

It is worth to know, that if an heir belongs to a zero tax group, but failed to submit the appropriate form to a tax office within 6 months, they will be treated as a person from the 1st tax group, i.e. they will lose the tax exemption.

Expert team leader DKP Legal Marta Oleśkowska
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