Tax offices in Poland began intensive checks on donations transferred between household members. In particular, officials shall focus on the way money is transferred and respect the formal requirements of specified transactions. Although donations from loved ones may be exempt from tax, misdeeds may consequence in serious consequences, including severe financial penalties.
Mistakes that may cost taxpayers
According to regulations, donations made to household members (such as parents, children or siblings) are tax exempt provided that certain formal requirements are met. Unfortunately, unawareness of regulations or insignificant errors in the procedure may consequence in the failure of this exemption and consequently the request to pay donation tax.
Examples of Life show how easy it is to make a mistake that will have serious financial consequences. In 1 case, Father gave his daughter money to buy the apartment, however, alternatively of making a bank transfer, he gave money “in hand”. This way of donating a donation was considered Unreported donationwhich led to a taxation payment.
Another example is that Mother paid off part of her daughter's creditby depositing money on bank method accountNot straight to your daughter's account. Fiscalis considered that this method of payment did not meet the formal requirements, which besides required the payment of the tax.
What amounts can be transferred without tax?
Polish law provides three taxation groups for donations that have different quota limits. delight note that exceeding these limits involves the work to submit a donation to tax office. Otherwise, a taxable individual is liable to pay a taxation that may even amount to 20% the value of the funds transferred. Here are the details for limits on donations:
- Group I (closest family, e.g. parents, children, siblings) – to 36 120 PLN within 5 years,
- Group II (other relatives, e.g. uncle, nephew) – to 27,090 zł,
- Group III (other people, e.g. friends) – to PLN 5,733.
If the donation exceeds the amount specified for the group, the recipient must submit it to the taxation office. Otherwise, it can be applied donation taxwhich may amount to up to 20% of the value of the funds transferred.
What to do to avoid fiscal problems?
In order to avoid penalties and unnecessary fiscal problems, a number of key principles must be respected:
- Transfer donations by bank transfer – avoid giving money in cash, which can be considered Unreported donation.
- Donatewhich exceed the limits for the taxation group concerned.
- Document All Donations – keep evidence of transfers, donations and correspondence that can confirm the intent and value of the funds transferred.
- Use the taxation card – if you are a household associate who makes a donation, remember to submit appropriate papers in Tax office.
Intense checks tax offices on donations are part of a broader strategy to combat tax avoidance. Even tiny donations in cash can exposure the donor to advanced financial penalties. It is crucial to comply with the rules on formalities, specified as the way money is transferred and to make donations beyond the limits set.
Remember that donations made between closest household members are exempt from tax, but only if all formal requirements are met. Otherwise, the financial consequences could be borne, which could be up to 20% of the value of the funds transferred.
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Tax offices control accounts of Poles – penalties can be huge
