How does Polish Inheritance Tax Work?

Polish Inheritance Tax

Inheritance tax is a tax that is levied on the transfer of assets from a deceased individual to their heirs. In Poland, inheritance tax rules apply to both residents and non-residents of the country. In this article, we will discuss the Polish inheritance tax rules in detail, including the tax rates, exemptions, and payment requirements.

Inheritance Tax Rates

In Poland, inheritance tax rates are based on the value of the inherited assets and the relationship between the deceased and the heir. The inheritance tax rates are as follows:

• Spouses, descendants (children, grandchildren, etc.), and parents: 0% for assets valued at up to PLN 9,637,000 (approximately €2.1 million) and 20% for assets above this threshold.

• Siblings, nieces/nephews, and other individuals: 0% for assets valued at up to PLN 2,155,000 (approximately €471,000) and 20% for assets above this threshold.

It is important to note that the inheritance tax threshold is calculated per each individual heir, which means that each individual can inherit up to the tax-free amount.

Inheritance Tax Exemptions

There are certain exemptions from inheritance tax in Poland. For example, inheritance tax is not levied on assets inherited by a spouse, descendants, and ascendants (parents and grandparents). In addition, certain types of property, such as works of art, are exempt from inheritance tax.

Another exemption is available for individuals who inherit assets from the same individual within a five-year period. In such cases, the value of the inherited assets is combined, and the tax rate is calculated on the total value. This means that the threshold for the higher tax rate will be reached sooner, and the tax rate will be higher.

Inheritance Tax Returns and Payment

In Poland, inheritance tax returns must be filed within six months from the date of death of the deceased. The tax is paid to the tax office within one month from the date of filing the inheritance tax return. The heir is responsible for filing the tax return and paying the tax.

If the heir fails to file the tax return or pay the tax within the prescribed time limit, interest will be charged on the outstanding amount until it is paid. The interest rate is currently set at 8% per year.

It is important to note that the Polish tax authorities are very strict in enforcing inheritance tax rules, and failure to comply with the rules can result in penalties and fines.

Conclusion

In conclusion, the inheritance tax system in Poland is relatively straightforward, with tax rates based on the value of the inherited assets and the relationship between the deceased and the heir. There are exemptions from inheritance tax, but it is important to seek professional advice on inheritance tax matters to ensure compliance with Polish tax laws. Failure to comply with the rules can result in penalties and fines, so it is essential to understand the rules and meet the filing and payment requirements.

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