Tax on civil law transactions

Tax on civil law transactions is regulated by the Polish act regarding tax on civil law transactions as of 9 September 2000 (consolidated text: Journal of Laws as of 2010, no 101, item. 649 with amendments)

The tax applies to:

1. the following civil law transactions:
   • sales and exchange agreements of property and property rights,
   • loan of money or goods delimited only according to type,
   • donation agreements – partially regarding the assumption of the debts, burdens or liabilities of the benefactor,
   • life annuity agreement,
   • inheritance division agreements and agreements of annulment regarding joint ownership – partially regarding payments or subsidies,
   • establishing mortgage,
   • establishing usufruct for a consideration, including irregular, and easment for a consideration,
   • irregular deposit agreements,
   • company agreements;
2. modifications of agreements listed in point 1, if they increase tax basis by tax on civil law transactions, subject to section 3, point 4 of the act;
3. court decisions, including arbitration, and settlements if they have similar legal effects as civil law transactions mentioned in points 1 or 2.

A tax basis is estimated the following was:

1. in case of sales agreement – market value of the property or property right;
2. in case of exchange agreement:
   • of housing unit which is a separate property or title to a cooperative housing unit for such a housing unit, or right to such a unit – a difference of market values of exchanged housing units or right to them,
   • in other cases – market value of the property or property right to which the higher tax applies;
3. in case of donation agreement – value of debts, burdens or liabilities assumed by the beneficiary;
4. in case of life annuity agreement- market value of real estate or perpetual usufruct;
5. in case of agreements of annulment regarding joint ownership or inheritance division – market value of the property or property right acquired over the share in joint ownership or inheritance;
6. in case of establishing usufruct for a consideration, including irregular one and  easement for a consideration – the value of the user’s benefits or the person’s benefits for whom the easement has been established, for a period the laws have been established;
7. in case of lean agreement and irregular deposit agreement – a sum or value of lean or deposit;
8. in case of company agreement:
9. in case of entering into the agreement – value of the contribution to the partnership or issued share capital value,
10. in case of contribution or increase of share capital – the value of contributions which increase the partnership resources or a value that increased the issued share capital,
11. in case of subsidies – the sum of a subsidy,
12. in case of transfer for use of property or property rights without consideration – annual value of use without consideration, which is assumed at 4% of the market value of property or property right transferred for use without consideration,
13. in case of transactions or merger of companies – value of contributions to a partnership resulting from transaction or value of issued share capital of share-holding company resulting from a transaction or merger,
14. in case of moving a share-holding company centre of management or its seat to the Polish territory – value of issued share capital;
15. in case of establishing mortgage – the sum of security for a debt.

Tax rates equal:

1. in case of agreements of sales, exchange, life annuity, inheritance division, annulment regarding a joint ownership and donation of:
   • real estate, chattel, right of perpetual usufruct, right to cooperative housing or commercial unit, and resulting from the cooperative law provisions: the right to a detached house and the right to a housing unit in a small dwelling house – 2%,
   • other property rights – 1%;
2. in case of the loan or irregular deposit agreements – 2% (with reservations resulting from the act)
3. in case of establishing mortgage:
4. for securing actual debts – 0.1 % from the secured debt amount,
5. for securing a debt of a non-defined value 19 zł;
6. 0.5% from the company agreement.

Market value of the subject of civil law transactions is determined on the basis of average prices used within the trade of property of such type and kind, taking into account their location, state and degree of wear and tear, as well as in trade of property rights of similar type, from the day the act is executed, without subtractions of debts and burdens

If a taxpayer did not determine the value of the subject of civil law transaction or the determined value does not correspond (according to the tax office assessment) to the market value, the above-mentioned office shall call the taxpayer to determine it by lowering or increasing, within the term no shorter than 14 days since the day the call was delivered, having previously stated the value according to his own initial assessment.

If a taxpayer, in spite of the above-mentioned warning, did not determine the value or provided a value which does not correspond to the market value, the tax office will determine its value with the help of an appointed expert or on the basis of the appraiser’s opinion provided by the taxpayer. If a tax office appoints an expert, and the value determined based on his opinion differs by more than 33% from the value provided by the taxpayer, the costs of estimate shall be paid for by the taxpayer.