Last updated: 05.02.2025
What is PCC tax in Poland?
The Tax on Civil Law Transactions (PCC) is an obligatory tax imposed on specific civil law agreements in Poland. It applies to transactions where value is exchanged, including the sale of property, company formations, and loan agreements. This tax ensures that non-VAT transactions are still subject to taxation under the Polish tax system.
PCC is regulated by the Polish Tax Code and must be reported to the tax office within 14 days of the taxable event. The obligation to pay PCC falls on the party benefiting from the transaction, such as the buyer in a sales contract or the borrower in a loan agreement. Certain transactions, like those subject to Value Added Tax (VAT) or involving specific exemptions, may be tax-free under Polish law.
Understanding when PCC applies, how to calculate it, and which exemptions may apply is crucial for both individuals and businesses to ensure full compliance and avoid penalties.
What Transactions Are Subject to PCC?
PCC applies to a broad range of civil law transactions, including:
- Sale and exchange of property, including real estate, vehicles, and property rights.
- Loan agreements, whether between private individuals or business entities.
- Company formation and capital increases, affecting limited liability companies (LLCs) and joint stock companies.
- Mortgages and usufruct rights used as loan collateral.
- Inheritance and donation agreements, subject to tax-free thresholds and exemptions under Polish law.
Taxpayers must ensure proper tax declaration and compliance with Polish tax regulations to avoid legal risks and optimize tax obligations.
Who Pays the Tax on Civil Law Transactions (PCC) in Poland?
The PCC tax obligation depends on the type of civil law transaction. The responsible taxpayer is:
- Buyer – Pays PCC in sale agreements (e.g., purchasing real estate, vehicles, or shares).
- Borrower – Responsible for loan agreements.
- Company – Pays PCC in company formation and capital increases (e.g., limited liability companies, joint stock companies).
- Mortgage Creator – The party establishing the mortgage is liable.
Certain transactions may qualify for tax exemptions or lower PCC rates, depending on Polish tax regulations.
PCC Tax Rates in Poland
The tax rates on civil law transactions vary based on the type of transaction:
- 2% – Real estate purchases (land, buildings, apartments).
- 1% – Transfer of other property rights, including shares in companies.
- 0.5% – Loans and capital increases in companies.
- 0.1% – Mortgages securing existing claims.
PCC must be declared and paid within 14 days of the transaction date to the relevant tax office.
How to Comply with PCC Tax in Poland – Practical Guidelines
Paying the Tax on Civil Law Transactions (PCC) in Poland requires careful attention to deadlines, documentation, and potential exemptions. To ensure compliance and avoid penalties, taxpayers must follow these key steps:
PCC Payment and Declaration
The PCC tax must be paid within 14 days from the transaction date. In most cases, the taxpayer is responsible for submitting the PCC-3 declaration to the tax office. However, for notarized transactions, such as real estate purchases, the notary may handle the tax settlement.
Certain transactions are exempt from PCC, particularly when they are already subject to Value Added Tax (VAT). For example, shareholder loans or the sale of financial instruments may qualify for tax exemptions under specific conditions.
Why Proper PCC Compliance Matters?
Failure to report or pay PCC on time can result in penalties, interest charges, or disputes with the tax authorities.
Given the complexity of tax laws, companies and individuals conducting frequent transactions should consider professional tax advice. Understanding the broader Polish tax system, including corporate income tax, capital gains tax, and withholding tax, can help optimize tax obligations and ensure compliance.
For businesses operating in Poland, compliance with other tax regulations is equally crucial. If you’re involved in corporate structures, financing, or international transactions, check out our guides on:
- Corporate Income Tax (CIT) – covering tax rates, revenue sources, and tax loss settlements.
- Value Added Tax (VAT) – including registration, reporting, and refund procedures.
- Capital Gains Tax – understanding how it differs from operational income taxation.
- Withholding Tax (WHT) – explaining payment thresholds, exemptions, and beneficial ownership rules.
Remember that staying informed about the evolving tax regulations in Poland can help you make better financial decisions and prevent compliance risks.
FAQ – Tax on Civil Law Transactions (PCC) in Poland
Does PCC affect personal income tax or corporate income tax?
No, PCC is separate from personal income tax and corporate income tax. However, business activities like company formations or capital increases may be subject to PCC under the corporate income tax act.
Is PCC applicable to non-residents in Poland?
Yes, non-residents must pay PCC on taxable transactions in Poland, such as purchasing real estate. However, double tax treaties may help avoid double taxation on worldwide income.
Can PCC be deducted from taxable income?
No, PCC is not tax deductible and does not reduce the tax base under personal income tax or corporate income tax. It must still be reported in the annual tax return.
Does PCC apply to VAT payers?
PCC generally does not apply if a transaction is subject to Value Added Tax (VAT). However, certain business activities may still require paying tax under PCC rules.
What is the tax rate for PCC on property sales?
The tax rate for real estate purchases is 2%, while the rate for shares and other property rights is 1%.
When must PCC be paid?
PCC must be paid within 14 days of the transaction. The payment recipient must also submit the PCC-3 declaration with tax authority to avoid penalties.
Does PCC apply under lump sum taxation?
No, lump sum taxation applies to business activities under specific tax rules, whereas PCC is a separate tax on civil law transactions. However, companies and other entities using lump sum tax must still comply with PCC regulations when conducting taxable transactions in each calendar year.
Can PCC payments reduce the taxable base?
No, PCC does not reduce the taxable base under individual taxation or corporate income tax. It is a separate obligation under taxation in Poland and must be reported accordingly.
Is PCC included in local income taxes?
No, PCC is not part of local income taxes. It is a transaction-based tax and applies independently of income tax rates at the national or local level.
Are there PCC exemptions based on the tax-free amount?
Yes, some transactions qualify for PCC exemptions if they fall under a tax-free amount threshold. However, this depends on the specific nature of the transaction and Polish tax laws and tax reducing amount.
Does PCC affect tax revenue in Poland?
Yes, PCC is a source of tax revenue for the government, collected alongside other taxes such as personal income tax and corporate income tax.
How does the tax year impact PCC obligations?
PCC is tied to specific transactions rather than the tax year. The general rule is that it must be paid at the time of the transaction rather than with an annual tax return.
Do Polish resident companies always pay PCC?
Polish resident companies must pay PCC when conducting taxable transactions, such as capital increases or real estate purchases, unless an exemption applies.
Can PCC be refunded by the National Bank?
No, the National Bank does not process PCC refunds. However, if a transaction is canceled or voided, taxpayers may apply for a refund through the tax office under specific conditions.
