Inheritance tax in Poland
- Inheritance in Poland
- Statutory succession
- Inheritance tax
- Property inheritance
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 36,120 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 36,120 for persons belonging to the 1st tax group,
- PLN 27,090 for persons belonging to the 2nd tax group,
- PLN 18,060 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.
Tax is calculated on amounts that exceed the free amounts for each tax group, according to a scale:
|I inheritance tax group||
|II inheritance tax group||
|III inheritance tax 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 where excess is more than PLN 22,256 would be the following:
|7%||I inheritance tax group|
|12 %||II inheritance tax group|
|20%||III 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.
Inheritance tax – Q&A
Do inheritance acquisitions incur inheritance tax?
In Poland, there is inheritance and donation tax, which must be paid both when an heir has received an inheritance under the testator’s will and when the heir has received an inheritance under statutory succession. According to the law, inheritance tax is also payable on inheritances, as well as on the acquisition of units or rights to savings deposits as a result of a disposition on the death thereof. Members of the close family receiving an inheritance can count on preferential payment burdens to the Tax Office.
Who is subject to inheritance tax in Poland?
Individuals who have acquired assets through inheritance, in case its value exceeds the tax-free amount (tax allowance).
What is the tax-free value of an inheritance?
Tax is not payable on the acquisition of inherited property with a pure value not exceeding the tax-free amount, which is:
- PLN 36,120 – if the acquirer is a person in tax group I – spouse (current, not former), separated spouse, descendants (e.g., son, daughter, grandchildren, great-grandchildren), ascendants (e.g., mother, father, grandparents), siblings, stepchildren, stepfather, stepmother, in-laws, son-in-law, daughter-in-law
- PLN 27,090 – if the acquirer is a person in tax group II – descendants of siblings (e.g., nephew, niece), siblings of parents (e.g., uncle, aunt), descendants and spouses of stepchildren, spouses of siblings (e.g., sister’s husband), siblings of spouses (e.g., wife’s brother-in-law), spouses of siblings of spouses (e.g., husband’s sister’s husband), spouses of other descendants
- PLN 18,060 – if the acquirer is a person in tax group III – all persons not included in the previous two groups, including persons unrelated to the recipient.
Is the closest family entitled to inheritance tax exemption in Poland ?
In the case of inheritance from a member of the immediate family (spouse; descendants: children, grandchildren, great-grandchildren; ascendants: parents, grandparents, great-grandparents; stepchildren; siblings; stepfather or stepmother), you can benefit from a total exemption from inheritance and gift tax. The exemption does not apply to inheritances when the testator’s death occurred before January 1, 2007.
How to benefit from the inheritance tax exemption in Poland?
To take advantage of the exemption, you have to report the acquisition of an inheritance to the appropriate head of the tax office. Tax regulations provide a specific deadline for this – 6 months from the date when the tax obligation arises. Importantly, each of the heirs submits a separate SD-Z2 notification.
It should also be remembered that when the market value of the inheritance does not exceed the tax-free amount, there is no obligation to file a notification, but what applies is the principle of accumulation of the value of property acquired recently from the same person and during the 5 years that precede the acquisition of the inheritance.
Failure to report the acquisition of an inheritance within 6 months, will result in the payment of tax under the rules for tax group I.
When do I have to pay inheritance tax?
Tax liability for inheritance tax in Poland arises, as a rule, when the court order confirming the acquisition of an inheritance becomes final, or when the deed of certification of inheritance is registered by a notary public or when a European certificate of inheritance is issued. From this moment, a period of 1 or 6 months should be counted for reporting the acquisition of an inheritance to the tax office.
How to report the inheritance acquisition to the tax office?
To report the acquisition of an inheritance is to submit a tax form to the appropriate head of the tax office. If the value of the property received exceeds the tax-free amount and the exemption for the closest family has not been used, an SD-3 tax declaration must be filed, while if a tax exemption has been used, an SD-Z2 tax declaration has to be chosen. The SD-3 return must be filed to the tax office within 1 month from the date the tax liability arises, while the SD-Z2 return must be filed within 6 months from the date the tax liability arises.