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Inheritance and Gift tax for non-resident Polish Citizens - laws in Poland?

1 Jan 2019 #1
I am curious about Polish tax law and how it applies to Polish citizens living abroad. Are Polish citizens living abroad treated equivalently to non resident aliens? Specifically if a Polish citizen living permanently abroad inherits assets or money located in a country that is not Poland do they need to pay the Polish inheritance tax on it.I found some translations of the Polish inheritance law that seems to indicate that Polish citizens who receive inheritances or gifts in foreign countries need to pay inheritance tax on it. But Poland is usually considered to have residence based taxation. So is there an exception if the citizens are residing abroad and are inheriting non Polish assets? For example say John who lives in Canada dies (or just gifts it to Matt while he is alive) and leaves a house in Toronto to Matt who is a dual Polish Canadian citizen living in Toronto. Does Matt need to pay inheritance tax (or gift/donation tax) to Poland? Does he need to declare it to the Polish tax authorities? I contacted the consulate where I live and told me they thought it would not be taxed but that they were not sure. If anyone has anymore concrete answers/ information/ opinions I would appreciate it a lot. Thank you.


The following is the law that I saw:
"Podatkowi od spadków i darowizn podlega nabycie przez osoby fizyczne....własności rzeczy znajdujących się za granicą lub praw majątkowych wykonywanych za granicą, jeżeli w chwili otwarcia spadku lub zawarcia umowy darowizny nabywca był obywatelem polskim lub miał miejsce stałego pobytu na terytorium Rzeczypospolitej Polskiej."-

Which I believe comes from Act of 28 July 1983 on inheritance and donation tax.
terri 1 | 1,664
2 Jan 2019 #2
Interesting topic. First, it would all depend where a person has his permanent place of residence. This is what the above states 'miejsce stalego pobytu' means permanent place of residence. There is a definition of what exactly is considered 'permanent place of residence'.

The above Law relates to citizens who are permanently resident in Poland and who get gifts, inheritances from Poland and countries other than Poland.
cms neuf - | 2,069
2 Jan 2019 #3
Inheritance tax law generally follows citizenship rather than residence but basically if you are rich all govts who have taken your money at some point will try one last heave to get your hard earned assets. In the UK there are famous cases about people who got screwed for death taxes because they had kept up their subscriptions for the golf club or some local operatic society.

The Polish law refers to citizenship too - if you are talking about serious amounts then rather refer to a lawyer and especially check the double tax treaty with Canada. You won't be the only person in this boat as the Polish community in Canada is quite wealthy and the generation of emigrants form the 60s and 70s are dying.

Incidentally the whole topic is under debate because of the exit tax the Polish govt wants to introduce on people who change their tax residence - is it constitutional that the people who pay the exit tax then lose out in Polish inheritance tax (on assets that have already been taxed once) ?
2 Jan 2019 #4
First of all thank you both of you to responding to my question.
@Terri When I asked my friend who speaks Polish she translated it to me as "national or someone who has their permanent place of residence in Poland" with either condition being sufficient. However she also told me that she does not understand "legal polish" very well. So in your opinion if someone who has citizenship but is definitely not permanently resident (or even not having any connection in Poland beyond the passport) would they have to pay the tax on non- Polish gifts and inheritances? Say Matt is permanently residing in Toronto.

@cms neuf The tax treaty with Canada has no inheritance tax provisions (my understanding is that Poland has only a couple of these agreements on inheritance tax with small European countries like Hungary). In this case lets assume that "Matt" never was a Polish tax resident (ie he had a polish passport through his father to visit relatives with him). I realize in this case it would be hard for Poland to actually enforce the tax but it will be easier in the future with the Common Reporting Standard since he does have the passport. Also the inheritance tax in Poland paid by the person who receives the inheritance not the person who dies which I believe is the opposite in the UK. So in your opinion Matt would likely have to pay the inheritance tax despite only ever living in Canada?

Thanks again to both of you. Also full disclosure, at this time this is a purely theoretical discussion, I haven't inherited any money in Canada but one day it could be the case.
delphiandomine 88 | 18,454
2 Jan 2019 #5
Your best bet is to ask KAS for clarification. They're very helpful:

Uniform Tax and Customs Information Centre in Poland - clients can still use well known phone numbers: 801 055 055 or 22 330 03 30

terri 1 | 1,664
2 Jan 2019 #6
Having a citizenship (i.e. a Polish passport) and being permanently resident for tax purposed in another country, does not mean that Polish taxes apply. Polish taxes apply to Polish nationals who are permanently resident in Poland. You have to understand the meaning of 'permanently resident'.

There are millions of people who have Polish passports (and therefore polish citizenship) who have never been to Poland or had anything to do with Poland and I would like to see the Polish government trying to get any money due in inheritance tax from them when their parents have left them inheritance and they live in Iceland, Hong Kong or Taiwan or South Africa. However, I will search for the interpretations on the law myself.

In an ideal world it is better to gift, sell or transfer the title to another person whilst you are still alive and as long as you live for so many years after there will not be a problem.
2 Jan 2019 #7
Thanks again to those who responded.

@delphiandomine What is KAS? I don't know that acronym. Do they give information in English? I don't speak Polish but I suppose I could ask my friend to call as a last resort.

@terri Thank you for your reply. In Polish law it seems that the gift and inheritance tax are identical so giving preemptively would just incur the equivalent gift tax if the inheritance tax would have been due. Out of curiosity what is the definition in Polish law of "permanently resident" for tax purposes?

Thanks again.
delphiandomine 88 | 18,454
2 Jan 2019 #8
What is KAS?

Krajowa Administracja Skarbowa. It's the National Tax Administration, and yes, they speak English.
3 Jan 2019 #9
Thank you for the idea. I did try calling them but I got an automated machine in Polish that I could not navigate. I hung around for a few minutes to see if a person would eventually pick up but no one did. Still it was worth a shot.
30 Jan 2019 #10
Ok for anyone who might ever be curious about this question I would like to share what I found out. I emailed the National Tax Administration and was told that yes Polish citizens, even those residing permanently abroad, do have to pay the Inheritance and Donation tax on any inheritance and donation they receive regardless of the country it is located in. In addition to the email this was also backed up by information in an EU study (in english) on the effects of inheritance double taxation on the functioning of the single market (titled: STUDY ON INHERITANCE TAXES IN EU MEMBER STATES AND POSSIBLE MECHANISMS TO RE- SOLVE PROBLEMS OF DOUBLE INHERITANCE TAXATION IN THE EU). According to the study the Czech republic, Hungary, Poland, Greece, Bulgaria, and the Netherlands all impose inheritance tax on the basis of citizenship. I also found an article in Polish responding to a question about the inheritance tax that said that a Polish women who married a British man and lived in the UK and received a gift/donation from his parents would need to pay the tax to Poland. So Poland does tax worldwide inheritances of Polish citizens world wide.

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