Individuals being tax residents in Poland are subject to taxation on all income, including income from capital gains, regardless of the location of the sources of income (unlimited tax liability).

Based on domestic law,, a person with a place of residence on the territory of Poland is an individual who:

1) has a centre of personal or economic interests (centre of life interests) in the territory of the Republic of Poland, or

2) stays on the territory of the Republic of Poland for more than 183 days in a tax year.

Individuals who are not resident in the territory of Poland are subject to taxation only on income (revenue) earned in the territory of Poland. Such persons have a limited tax liability.

Income (revenue) earned on the territory of Poland by persons with limited tax liability is considered, in particular, income (revenue) from

1) work performed on the territory of Poland on the basis of a service relationship, employment relationship, contract work and cooperative employment relationship, regardless of the place of payment of remuneration;

2) personal activities performed on the territory of Poland, regardless of the place of payment of remuneration;

3) business activity carried out on the territory of Poland, including through a foreign establishment located on the territory of Poland;

4) real estate or rights to such property located in the territory of Poland, including from the sale thereof in whole or in part or from the sale of rights to such property;

5) securities and derivative financial instruments other than securities admitted to public trading on the territory of Poland on a regulated stock exchange, including proceeds from the sale of such securities or instruments and from the exercise of rights deriving therefrom;

6) the redemption, repurchase, withdrawal and other cancellation of shares in capital funds established in accordance with the regulations in force in Poland, as well as the sale of such shares against payment

7) transfer of ownership of shares in a company, of all rights and obligations in a company that is not a legal entity, or of participation rights in an investment fund, a collective investment institution or another legal entity and rights of a similar nature, or of claims arising from the ownership of such shares, all rights and obligations, participation rights or rights, if at least 50% of the value of the assets of such company, company that is not a legal entity, investment fund, collective investment institution or legal entity consists, directly or indirectly, of real estate located in the territory of Poland or rights to such real estate.

10) unrealised profits (exit tax).

Above rules are modified accordingly based on Tax Treaties concluded by Poland with particular countries.

In Poland, there are several taxation regimes which generally depend on the type of earned income.

The basic method of taxation of personal income is the tax scale. Under the tax scale:

1) income up to PLN 30000 is tax-free,

2) income over PLN 30000 is taxed at the rate of 12%,

3) income over PLN 120,000 is taxed at the rate of 32%.

This method is used, for example, to tax income from employment, retirement pensions and income from personal activities (e.g. remuneration of members of management boards performing their duties pursuant to a resolution on their appointment, supervisory boards).

Business activities may also be taxed according to the tax scale. Alternatively, it may be subject to a 19% flat PIT or a specific lump sum tax calculated on revenues (without cost deductions). When business activities are taxed according to the tax scale or the flat rate tax, the taxpayer is taxed on the income, i.e. on the difference between the income and the costs incurred to obtain it. Lump sum  taxation, on the other hand, differs in that it taxes revenue (not lowered by the tax-deductible costs) rather than income (which includes tax-deductible costs). tax rates attributable to income vary from 3% to 17%, depending on type of business.

Lump sum taxation at 8.5-12% rate apply also to revenues from rental of real estate, which is performed outside business activity.

Persons engaged in business activities may also benefit from a tax on income from qualified intellectual property rights at a rate of 5%. Rights subject to this tax include patents, utility models, industrial designs, topographies of integrated circuits, and copyrights in computer programs.

Capital gains are subject to 19% PIT. That includes inter alia sale of shares and other securities, redemption of shares with buy-back

Income from sale of real property done not within business activity is subject to 19% PIT rate (no PIT progression applies). Disposal of real property done outside of business activity after 5 years following acquisition is tax exempt.

Disposal of movables done outside business activity is subject to progression rates, but  tax exempt if disposed after 6 months from acquisition.

Some passive income is subject to 19% tax withheld at source. Typical types of income subject to withholding tax are described in point .4.

Individuals may also be subject to CFC tax levied on income controlled by them in foreign subsidiaries, which meets certain criteria at a rate of 19%. Taxpayers of this tax must file a return by the end of the ninth month of the following tax year and pay the tax due by that date.

Moreover, a Polish tax-resident who derives certain types of income exceeding PLN 1 million in a tax year is required to pay solidarity levy at the rate of 4% on the excess of this amount. Solidarity levy is settled separately to PIT but within the same deadline (i.e. 30 April of the year following the respective fiscal year).

The solidarity levy’s calculation base consists of e.g. income subject to standard progressive tax rate, income arising from the sale of securities or shares, income arising from derivatives, gains from capital funds and income from controlled foreign companies. Some of the categories of incomes which are subject to PIT taxation are not covered by the solidarity levy e.g. incomes subject to withholding tax as dividends and interest obtained not within business activity, business income subject to lump sum taxation on revenue obtained.

The tax year corresponds to the calendar year and begins on 1 January and ends on 31 December. As a rule, taxpayers are obliged to submit a statement of the amount of income (loss) earned during a tax year to the tax office by 30 April of the year following the tax year. The tax due should also be paid by this date.

Some type of income (eg. employment, business activity income) are subject to advance tax payment (monthly or quarterly)  throughout the year. Capital gains tax is paid and declared annually only.

Social security contributions

In Poland, social security consists of pension insurance, disability insurance, accident insurance, labour fund, and sickness insurance. The Polish social security system covers people economically active, like employees or self-employed people. Social insurance may be mandatory or voluntary.

With respect to employment contracts, both the employer and the employee are obligated to contribute to the Polish social security system. Apart from paying its own share, the employer is obligated to withhold the employee‘s share of the social security contributions and remit them to the Social Security Authorities (ZUS). In both cases, the relevant payments shall be made monthly.

The employer pays total contributions in a range of 19.21% to 22.41% of the employee’s gross salary (the employer’s contribution rate includes an accident insurance element that varies according to the number of employees insured and the business sector). The contribution rate for the employee is 13.71% of gross salary. The social security shares payable by the employer and the employee are tax-deductible items in their respective PIT settlements.

Part of the above rates apply to salaries below the cap of PLN 260,190 in 2025. The cap is changing every year. After exceeding this cap, the salary is subject to a contribution rate of 3.22% to 6.41% payable by the employer and 2.45% payable by the employee.

As regards self-employed persons, they pay social security contributions in a lump sum, regardless of their actual income. The base for social security contributions, thus the amount of contributions, depends on the forecast average monthly wage for a given year (i.e. calculation basis amounts to 60% of the forecast average monthly wage). Starting from 2025 the social security contributions will amount to PLN 1,773.96 monthly.

Self-employed persons whose income in the previous year did not exceed PLN 120,000 may pay contributions from the income obtained in the previous year (provided that they meet additional criteria).

There is also a relief for starting a business. Individuals under self-employment do not have to pay social security for the first six months of their activity. For the next 24 months, they can pay so-called ‘preferential contributions’ that are significantly lower than normal ones.

Health insurance

The monthly contribution rate for health insurance is 9% of the assessment base with respect to employees (and board members). In the case of obligatory participation, the assessment base is equal to the individual’s gross income decreased by the amount of the employee’s part of social security contributions. The health insurance assessment base is not tax deductible for taxpayers reconciling their income with the tax scale, thus the 9% of contribution rate for health insurance is financed from the employee’s net income.

Please note that there is no cap on the health insurance contributions’ assessment base.

As regards the self-employed persons, the rules for paying the health insurance contributions depend on the method of taxation of business activity and will change as of 1 January 2025.

Currently, the rules for paying the health insurance contributions depend on the method of taxation of business activity and are as follows:

1. 4.9% of income for sole proprietorships taxed at flat rate (19%).
2. 9% of income for sole proprietorships taxed according to the tax scale (12% and 32%).

The minimum healthcare contribution will amount to 9% of 75% of the minimum remuneration i.e. in 2025 it will amount to PLN 314.96. monthly for entrepreneurs earning the lowest income – it will apply to individuals taxed with the tax scale, flat PIT rate of 19% and so-called tax card.

Individuals taxed with a lump sum pay flat monthly health insurance in range up to ca 1.3 k PLN. There are plans to change that starting from 2026, consisting in an increase for those with highest earnings and introducing a proportional charge of 3,5% of reported revenues.  .

Polish tax legislation does not provide for a separate tax regime for persons directly investing in or holding certain types of assets.

However, it is worth noting the existence of a so-called relief for persons investing in alternative investment companies (Polish “ASI”). According to this relief, a taxpayer may deduct from the tax base established for the purpose of calculating the tax according to the tax scale or the 19% flat tax – provided that certain conditions are met – an amount equal to 50% of the expenses incurred for the acquisition or subscription of shares in

1) an alternative investment company; or

2) a capital company in which the alternative investment company holds

(a) holds at least 5% of the shares (stocks)

b) will hold at least 5% of the shares (stocks) as a result of the purchase or acquisition of shares (stocks) in that company within 90 days from the date of the purchase or acquisition of shares (stocks) in the capital company by the taxpayer.

Polish entities acting as tax remitters are obliged to collect withholding tax at a rate of 19% on earned income – regardless of whether the taxpayer is a Polish tax resident or not – from, inter alia

1) interest on loans, unless the granting of loans is a business activity

2) interest and discounts on securities

3) income from the redemption by the issuer of bonds on which periodic payments are due

4) interest or other income on funds accumulated in the taxpayer’s account or in any other form of savings, deposit or investment held by an authorised entity;

5) from dividends and other income from participation in the profits of legal entities;

6) from benefits received from the income of an investment fund, if the statutes provide for the distribution of such income to its participants without redemption, repurchase, refund or other cancellation of the participation certificates of such fund.

However, with respect to income earned in Poland by non-Polish tax residents, relevant double taxation treaties to which Poland is a party may apply and thus it may be possible to apply a reduced tax rate or exemption.

In addition, withholding tax at a rate of 20% (with reservation to double taxation treaties concluded by Poland) may also be levied on income earned in Poland by non-Polish tax residents from:

1) from copyrights or related rights, rights to inventive projects, trademarks and ornamental designs, including from the sale of such rights, from payments for providing the secret of a formula or production process, for the use or right to use industrial, commercial or scientific equipment, including means of transport, and for information related to experience gained in the industrial, commercial or scientific field (know-how);

2) consultancy, accounting, market research, legal services, advertising, management and control services, data processing, personnel recruitment and acquisition services, guarantees and warranties and services of a similar nature.

Poland’s main method of avoiding double taxation is the pro rata deduction method. This means that income earned abroad is taxed in Poland, but a taxpayer can deduct the tax paid abroad from the tax due in Poland. This deduction is only possible up to the amount of tax due on the income earned abroad. Still some of the treaties provides for exemption with progression to certain types of income.

The MLI Convention changes the method of double taxation avoidance in some Polish DTAs – from the method of exclusion (exemption) with progression to the pro rata deduction method.

The table below lists the DTAs with countries in which the method of avoiding double taxation has already been changed by the MLI Convention or will be changed in the nearest future:

income received from 1.01.2019	Austria, Slovenia
income received from 1.01.2020	United Kingdom, Ireland, Finland, Israel, Japan, Lithuania, New Zeland, Slovakia
income received from 1.01.2021	Norway, Belgium, Canada, Denmark, Portugal
income received from 1.01.2022	Jordan, Pakistan, Greece
income received from 1.01.2023	Estonia, Spain, Thailand
income received from 1.01.2024	Bulgaria, China, Romania, Mexico
income received from 1.01.2025	Tunisia

The method of avoiding double taxation does not change in other DTAs.

No, there is no wealth tax in Poland.

From the donor perspective (the one who makes the donation), donation is not subject to personal income tax (in some jurisdiction donation is treated equal to disposal in exchange for remuneration).

The acquisition by individuals of property located on the territory of Poland or property rights exercised on the territory of Poland by way of inheritance or gift is subject to inheritance and gift tax paid by the heir or donee. Moreover, each donation (also foreign assets) received by a person who has a permanent place of stay in Poland or is a Polish citizen, is subject to inheritance and donation tax. In addition to the above, there are other types of legal titles that are subject to this tax.

The amount of the tax depends on the tax group to which the acquirer is assigned. The tax group is determined by the personal relationship of the acquirer to the person from whom or after whom the property and property rights were acquired.

Individual tax groups include:

1) Group I – spouses, descendants, ascendants, stepchildren, sons-in-law, daughters-in-law, siblings, stepfathers, stepmothers and parents-in-law;

2) to Group II – descendants of siblings, siblings of parents, descendants and spouses of stepchildren, spouses of siblings and siblings of spouses, spouses of siblings of spouses, spouses of other descendants;

3) Group III – other purchasers.

The tax is calculated on the excess of the tax base over the tax-free amount according to the following rates:

1. Group I – 3%, 5% or 7%,
2. Group II – 7%, 9% or 12%,
3. Group III – 12% ,16% or 20%.

If the acquirer is a person belonging to:

1. Group I, the acquisition of property and property rights with a pure value exceeding PLN 36,120 from one person is subject to taxation,
2. Group II, the acquisition of property and property rights with a pure value exceeding PLN 27,090 from one person is subject to taxation,
3. Group III, the acquisition of property and property rights with a pure value exceeding PLN 5,733 from one person is subject to taxation.

The taxpayer is obliged to submit to the competent head of the tax authority, within one month from the date on which the tax liability arises, a tax return on the acquisition of property or property rights in accordance with the established model. Documents relevant for the determination of the tax base must be attached to the tax return.

The obligation to submit a tax return does not apply in cases where the tax is collected by the remitter, ie notary public. .

The tax shall be paid when the taxpayer, i.e. the acquirer, receives the decision of the tax authority determining the amount of the tax.

The acquisition of property or property rights from a close relative, i.e.  a spouse, descendants, ascendants, stepchildren, siblings, stepfather and stepmother is exempt from inheritance and gift tax if:

1) they report the acquisition of the property or property rights to the competent tax authority in the case of acquisition by donation within 6 months from the date on which the tax liability arose, and in the case of acquisition by inheritance – as a rule, within 6 months from the date on which the court decision confirming the acquisition of the inheritance became final, and

2) if the object of the acquisition by way of donation or donor’s order is cash, document its receipt with proof of its transfer to the acquirer’s payment account, to his account, other than a payment account, with a bank or a cooperative savings and loan association, or by postal order.

In case donation is done in a form of notarial deed prepared by Polish notary between close relatives mentioned above, it is tax exempt without obligation to report it to the tax office.

Poland has only few treaties relating to avoidance of double taxation with donation and inheritance tax, so it may happen that a certain individual is subject to that tax in few jurisdictions (e.g. real estate located abroad inherited by Polish citizens).

Please see the answer to question 7 and the exemption therein regarding the acquisition of property or property rights by a spouse, descendants, ascendants, stepchildren, siblings, stepfather and stepmother.

Individual income tax payers are entitled to deduct from their income, inter alia, the amounts of donations made for the purposes specified in Art. 4 of the Act on Public Benefit Activities (inter alia, charitable activities), to non-governmental organisations and entities referred to in Art. 3 par. 2 and 3 of the Act on Public Benefit Activities, or equivalent organisations as defined in the regulations on public benefit activities in force in a Member State of the European Union other than Poland or in another Member State of the European Economic Area, which carry out public benefit activities in the field of public tasks and realise these objectives.

The total amount of deductions for donations, including those made for purposes other than those mentioned above, may not exceed an amount equal to 6% of income in a tax year. This means that if an individual makes only the donations listed in the first paragraph above, he or she will be entitled to deduct donations up to an amount equal to 6% of his or her income.

Donations made to individuals are not deductible.

Real estate in Poland is subject to real estate tax which is a municipal tax. Land and buildings or parts of them are subject to this tax. Structures are subject to tax if used for business purposes.

It is irrelevant whether a real estate taxpayer is a Polish tax resident or not. What is important is the type of title to the property and location of real estate. Only real estate located in Poland is subject to this tax.

The tax base for land is its area, and for buildings or parts of them – their usable floor area. The rates of real estate tax are set by the relevant local council, but may not exceed the annual rates set by the Minister of Finance. The rate for land is fixed per square metre of surface area. Similarly, the rate for buildings is set per square metre of usable floor area.

Tax rates are significantly higher for assets which are used in business activity than those held for private purposes. Also, apart from buildings and land plots, structures are taxed if they are used for business purposes, with 2% tax calculated based on their initial tax value established for depreciation purposes.

In Poland, provisions for the taxation of virtual currencies have been introduced into personal income tax. A virtual currency is – generally speaking – a digital representation of value.

Income tax on income from the paid sale of virtual currencies is 19% of the income received.

Income from the paid sale of virtual currency is the difference in the tax year between the sum of income from the paid sale of virtual currency and the cost of the same.

The deductible costs of income from the paid disposal of virtual currency are, first of all, the documented expenses directly incurred for the acquisition of the virtual currency and the costs associated with the disposal of the virtual currency. These costs should – as a rule – be deducted in the tax year in which they are incurred.

The excess of these costs over the proceeds from the paid sale of virtual currency received in the tax year increases the tax deductible costs from the paid sale of virtual currency incurred in the following tax year.

Individuals can also be taxpayers:

1) tax on civil transactions (equivalent of stamp duty),

2) tax on means of transport,

3) tax on gambling.

The tax on civil law transactions applies to certain transactions specified in the Act on Tax on Civil Law Transactions, such as:

• contracts for the sale and exchange of property and property rights (1% tax on intangibles, including sale of shares and 2% on tangibles) ,
• loan agreements, money or things specified only by their nature (0,5% on value of loan, but certain exemptions may apply),
• establishing a partnership or company and amending articles of association of a partnership or a company (0.5% on share capital or 0,5% on contributions made to partnership, certain exemptions may apply).

Taxpayers of the tax on civil law transactions are, inter alia, individuals who are parties to taxable civil law transactions:

• purchase contract – the buyer,
• exchange contract – both parties,
• loan agreement – the borrower.
• partnership or company (establishment/increase of equity)- these entities

The tax must be paid within 14 days from the date on which the tax obligation arose.,. The taxpayer is also obliged to submit a tax return for civil law transactions, unless the act is done in a form of notarial deed in front of the Polish notary (then the notary becomes a tax remitter).

If an  individual owns a means of transport with a maximum permissible weight of more than 3.5 tonnes, it is subject to vehicle tax.

Taxpayers of vehicle tax are natural persons who are owners of vehicles, as well as owners of vehicles registered in the territory of Poland which are entrusted to a Polish entity by a foreign natural or legal person.

As a rule, the tax is paid in two instalments in proportion to the duration of the tax obligation, by 15 February and 15 September of each year, to the account of the municipality in which the taxpayer’s place of residence is located.

There is also a gambling tax in Poland. A taxpayer of gambling tax is, i.a., an individual who organises gambling games on the basis of a concession of licence granted, with the exception of promotional lotteries, an individual that organises games covered by a state monopoly and a participant in a poker tournament organised by an entity that holds a concession to operate a gambling casino.

The Polish legislator provides for the following reliefs for individuals transferring their tax residence to Poland: the so-called return relief and the lump-sum taxation of the income of foreigners who transfer their residence to Poland.

The income of a taxpayer who has transferred back his place of residence to the territory of Poland is exempt from PIT up to an amount not exceeding PLN 85,528 in a tax year. In particular it covers income from:

(a) a business relationship, employment relationship, contract work and cooperative employment relationship,

b) mandate contracts,

c) from non-agricultural economic activity, taxed according to the tax scale, 19% flat tax or tax on qualified income from qualified intellectual property rights or a lump sum on registered income.

The above relief applies to four consecutive tax years, counted from the beginning of the year in which the taxpayer transferred this residence or from the beginning of the following year,

This exemption is subject to the following conditions:

1) the taxpayer is subject to unlimited tax liability on the territory of Poland as a result of the transfer of the place of residence, and

2) the taxpayer did not have his place of residence in the territory of Poland during the period of:

(a) three calendar years immediately preceding the year in which he transferred his place of residence to the territory of Poland, and

(b) the period from the beginning of the year in which he changed his place of residence in the territory of Poland to the day preceding the day on which he changed his place of residence in the territory of Poland; and

(3) the taxpayer:

(a) has Polish citizenship, a Polish citizenship card or citizenship of a Member State of the European Union or of a country belonging to the European Economic Area or of the Swiss Confederation other than Poland, or

(b) has had his place of residence

– in a Member State of the European Union or in a country of the European Economic Area, the Swiss Confederation, Australia, the Republic of Chile, the State of Israel, Japan, Canada, the United Mexican States, New Zealand, the Republic of Korea, the United Kingdom of Great Britain and Northern Ireland or the United States of America for at least the period specified in point 2, or

– on the territory of Poland continuously for at least 5 calendar years preceding the period referred to in point 2, and

4) is in possession of a certificate of residence or other evidence of tax residence for the period required to establish entitlement to this exemption; and

5) in the case of a taxpayer transferring his place of residence to the territory of Poland, has not previously used all or part of this exemption.

In addition, Polish legislation also provides for lump-sum taxation of the income of foreigners who transfer their residence to Poland.

Income earned outside the territory of Poland in a tax year is subject to a lump sum tax, except for income subject to the CFC tax.

The lump sum is PLN 200,000 for the tax year, regardless of the amount of foreign income received in that year. Foreign income is inter alia dividends from non Polish entities and sale of shares in non Polish companies (not listed in Poland and with no significant real estate in Poland).  In addition, a lump-sum taxpayer is obliged to incur expenses for economic growth, development of science and education, protection of cultural heritage or promotion of physical culture in the amount of at least PLN 100,000 per tax year, starting from the tax year immediately following the tax year in which the taxpayer transferred its place of residence to the territory of Poland.

Lump sum taxation may be applied for maximum 10 years after arrival to Poland.

Before relocating to Poland, it is advisable to seek tax and legal advice on the consequences of such a decision in relation to an individual’s specific professional, business, family and asset situation in his current jurisdiction (like exit tax). Moreover, it is essential to test how Poland would treat passive income generated from assets owned on the relocation date and located abroad, including holding companies, private foundations or trusts.

We would advise to verify benefits coming out from the Polish lamp sum taxation for new residents, as it may exempt foreign income. In addition to available treaty benefits (reducing withholding taxes), it may significantly reduce ultimate tax burden for natural persons. We would also recommend checking whether return to home country would not trigger Polish exit tax, as it is levied also on assets brought to Poland (i.e. not only on appreciation on value of assets when held in Poland).

It is recommended to thoroughly analyze the portfolio of companies controlled by individual, as Polish CFC rules may cause taxation of foreign income calculated on the subsidiaries level, even if they are controlled indirectly.

As Polish PIT is very complex and provides various options on taxation depending on source of income (high progressive rates, possibility to opt for flat rate 19% on business activity, solidarity tax of 4%, which is not levied on all types of income, different rules on health insurance), we would recommend to thoroughly analyze the situation of the individual and types of his/her activity to properly choose most beneficial options for taxation, as differences may be significant .

Lastly, we would recommend to monitor any donations and inheritance obtained by the individual from abroad as lack of reporting them in Poland may trigger significant donation tax burden, even if assets are located abroad. On the other hand, donations from close relatives, if reported to Polish tax office in due course (6 months deadline), will be tax exempt.

Polish legislation provides for a tax on unearned income, which is effectively an exit tax.

Poland levies immediate exit tax on individuals (which with respect to change of place of living within EU is perceived by majority of tax advisors as contradict to EU law). The following are subject to this tax:

1) the transfer of an asset outside the territory of Poland, as a result of which Poland loses the right to tax income from the disposal of this asset, while the transferred asset remains the property of the same entity;

2) the change of tax residence of a taxpayer with unlimited tax liability in Poland, as a result of which Poland loses the right to tax income from the sale of an asset owned by this taxpayer in connection with the transfer of his residence to another country.

In case of change of residency only some type of assets are subject to exit tax (i.a. shares, securities). Moreover, value of 4 mln PLN of assets is exempt from exit tax, with excess being taxable with below rates. .

The exit tax rates are:

1) 19% of the tax base – when the tax value of the asset is determined (most common );

2) 3% of the tax base – if the tax value of the asset is not determined (rarely applied).

Exit tax is due only if the taxpayer has had a place of residence on the territory of Poland for a total of at least five years in the ten-year period preceding the date of the change of tax residence.

There is no valuation of tax value of asset to current market value on the date of entry into Poland, so in fact exit tax is levied on total value of assets on the departure date, which causes that value which was “brought” to Poland is subject to tax on exit.  That may cause a high tax burden on leaving Polish jurisdiction unproportional to rational staying behind  introducing the exit tax concept in Poland.

The main rules of succession are that the assets of the diseased person (the testator) are inherited either by those family members indicated as heirs in the Civil Code (statutory heirs), or by the heirs listed in the last will and testament (testament heirs).

As regards statutory heirs, in the first place, the testator’s children and his/her spouse are appointed to the estate by law –  they inherit in equal parts. However, the share attributable to the spouse cannot be less than one quarter of the total inheritance. If one of the testator’s children did not live to see the opening of the inheritance, the share of the inheritance that would fall to him/her falls to his/her children in equal parts. If the testator has no descendants, his/her spouse and parents are entitled to the estate by law. The share of the inheritance of each parent who inherits jointly with the testator’s spouse is one quarter of the total inheritance.  In the absence of descendants and the testator’s spouse, the entire estate falls to his/her parents in equal parts. However, if one of the testator’s parents did not live to see the opening of the inheritance, the share of the inheritance that would fall to him/her falls to the testator’s siblings in equal parts, and if one of the siblings did not live to see the opening of the inheritance – to the sibling’s children. If one of the parents did not live to see the opening of the inheritance and there are no siblings of the testator or their descendants, the inheritance share of the parent inheriting jointly with the testator’s spouse is half of the inheritance. In the absence of the testator’s children, spouse, parents, siblings and siblings’ children, the inheritance falls to the grandparents of the testator in equal parts. If one of the testator’s grandparents did not live to see the opening of the inheritance, the share of the inheritance that would fall to him/her falls to his/her children, and in their absence, to his/her grandchildren in equal parts. In the absence of the testator’s spouse and relatives, appointed to inherit by law, the inheritance falls in equal parts to those children of the testator’s spouse, whose none of the parents lived to see the opening of the inheritance. In absence of the above persons, the inheritance falls to the local commune treasury of the testator’s last place of residence in Poland as the statutory heir. If the testator’s last place of residence in Poland cannot be determined or the last place of residence was abroad, the inheritance falls to the State Treasury as the statutory heir. What is important, the provisions on the appointment to inheritance under the Civil Code do not apply to the testator’s separated spouse.

Forced heirship rules apply, meaning that persons who would become statutory heirs are entitled to a compulsory portion of the estate if they were not (or not sufficiently) included in the distribution of assets as per the last will and testament. However, the forced heirship rules apply only to the descendants, the spouse and parents of the testator. The proportion of an individual’s estate which may be freely disposed of on death is in most cases 50%. The forced heirship rules stipulate that the statutory heirs are entitled to half (or two thirds in case of minors and those permanently incapacitated for work) of what they would have received by law.

In principle, under the Polish family law, spouses are subject to a statutory community of property regime (matrimonial property), unless otherwise agreed in a marital agreement. Under the statutory regime, all assets acquired by both or one of the spouses during the marriage are deemed to be jointly owned by the spouses, especially including earnings, income from joint property as well as income from the sole property of each spouse. Assets owned or acquired before entering into marriage are treated as a sole property of each spouse, as well as assets aimed to satisfy the personal needs of the spouse, even if acquired during the marriage, or assets acquired through donations or heirship. unless otherwise explicitly indicated by the donor/testator.

Spouses are also entitled to amend the abovementioned rules by entering into marital agreements and choosing one of the following regimes:

• contractual community of property,
• contractual separation of assets, and
• contractual separation of assets with an equalisation of the gained property.

By the contractual community of property regime, spouses are entitled to reduce or extend the statutory community of property, by adding or excluding certain assets to/from the joint matrimonial property of the spouses. However, that extension may not refer to assets gained through donations or heirship, rights derived from joint ownership under specific regulations, intangible rights of one of the spouses, claims for the damages for personal injuries or undue claims under the income-earning activities.

The contractual separation of assets regime means that each of the spouses holds sole ownership of both the assets acquired before the marriage, as well as those gained during the marriage (there is no matrimonial property).

In case of separation of assets with equalisation of the gained property, the above mentioned rules regarding the contractual separation of assets shall apply, with a reservation that, in case of termination of such regime, the spouse who acquired less gains on his/her sole property may claim equalisation of the gains. In case of death of one of the spouses during the effectiveness of such regime, the equalisation shall take place between the remaining spouse and the heirs of the deceased one.

The regime for matrimonial property  affects the succession as follows. If assets (e.g. shares in a business) belong to the matrimonial joint property of the spouses, upon death of a spouse who was a shareholder in the business, half of the matrimonial joint property (including half of the shares) goes to the surviving spouse and the other half is subject to division between heirs (in line with the rules described in Sec. 16 above).

Civil partnership is not yet implemented but is currently discussed in the government and the draft bill should be published still in December 2024 for consultations.

Relevant factors for the Polish succession law of the jurisdiction to apply on the death of an individual are:

1. citizenship
2. in case of multiple citizenships, the one to which one has the strongest connections
3. in case of no citizenship or a citizenship impossible to determine – domicile
4. in case of no domicile – habitual residence.

With respect to the succession of persons who died on or after 17 August 2015, it shall be governed pursuant to Art. 21 and Art. 22 of the Regulation (EU) No 650/2012 of the European Parliament and of the Council of 4 July 2012 on jurisdiction, applicable law, recognition and enforcement of decisions and acceptance and enforcement of authentic instruments in matters of succession and on the creation of a European Certificate of Succession („EU Succession Regulation”):

• (Art. 21 paragraf 1) the law applicable to the succession as a whole shall be the law of the State in which the deceased had his habitual residence at the time of death;
• (Art. 21 paragraf 2) where, by way of exception, it is clear from all the circumstances of the case that, at the time of death, the deceased was manifestly more closely connected with a State other than the State whose law would be applicable under paragraph 1, the law applicable to the succession shall be the law of that other State;
• a person may choose as the law to govern his/her succession as a whole the law of the State whose nationality he/she possesses at the time of making the choice or at the time of death;
• a person possessing multiple nationalities may choose the law of any of the States whose nationality he/she possesses at the time of making the choice or at the time of death;
• the choice shall be made expressly in a declaration in the form of a disposition of property upon death or shall be demonstrated by the terms of such a disposition.

With respect to the succession of persons who died prior to 17 August 2015 it shall be governed by the regulation of the Polish Private International Law Act, valid at the date of death of the testator (prior to introduction of the above mentioned EU Succession Regulation), stating that the succession shall be governed by the law of the State of nationality of the deceased, unless otherwise chosen in a valid will or other disposition of property upon death. In such case, the testator could choose the law of the State of his/her permanent residence or law of the State of his/her habitual residence.

As regards the conflict between the Polish succession laws and those of another jurisdiction with which the deceased was connected as well as with respect to consideration of any international law, treaty or convention, please refer to the answers under question 18.

However, there are no rules regarding the conflict between succession laws in case the deceased owned real property in another jurisdiction.

Conclusion of a Will is voluntary, but a Will should be especially considered in the following situations:

1. when an individual is married,
2. when an individual has children, especially when they are minor.
3. when certain assets from the estate should be inherited by certain individuals,
4. when distribution of estate assets should be different from the statutory regime (different proportions, different heirs),
5. when certain heirs should be obliged to make a specific property performance to the benefit of a given individual,
6. when certain heirs should be obliged to certain actions or to refrain from certain actions,
7. when certain individual(s) should be disinherited,
8. when a business is part of the estate,
9. when individuals from outside of the family should inherit certain assets,
10. when certain charities should inherit certain assets.

Although a simple written form (handwriting) is sufficient for a Will, a notarial deed is highly recommended for a Will. Notarial Wills, upon the choice of the testator, may be  recorded in an on-line database and are available to heirs and judges in succession cases. Also, a number of handwritten Wills is challenged by heirs. Additionally, in case a Will is made in form of a notarial deed, it can include a so called vindication record which means that certain individual becomes the owner and holds title of certain assets automatically upon death of the deceased and not after the court or notarial proceedings regarding the succession have been completed.

Formal requirements for a Will are as follows:

• it has to be an individual Will (joint Will of more than one individual makes the Will null and void)
• it has to be written and signed in person (no proxy allowed)
• it has to be drawn up without any defects of declaration of intent

There are few forms in which the Will can be drawn up but the two most common ones are the notarial deed (described above) and the handwritten form. In the latter case, the following is required:

• the Will has to be either handwritten in whole, dated and signed by the individual;
• however absence of date does not result in invalidity of the Will, provided that there are no doubts as to the capacity of the individual, as to the contents of the Will and as to the relation with other Wills.

A Will may be amended or revoked by the testator at any time. However, when the new Will is being drawn, while there is one in force already which has not been revoked by the new one, only the provisions that are in contradiction with the new document are deemed to be amended.

When an individual dies without making a Will:

• statutory provisions regarding succession will apply (as described in question 16),
• the heirs will be family members and in proportion indicated in the Civil Code,
• the successors become owners of the estate assets after the court or notarial proceedings have been completed, which sometimes may take even years (in case of court proceedings).

One may appoint in the Will its administrator who, if accepts the appointment, is responsible for collecting in assets, paying debts, and distributing to beneficiaries.

In case no administrator has been appointed (either the Will does not mention the administrator or there is no Will), the heirs become co-owners of the estate until the succession process is completed and they are jointly responsible for collecting in assets, paying debts, and distributing to beneficiaries.

Trusts do not exist in Polish law. Poland is not a party to the Convention of 1 July 1985 on the Law Applicable to Trusts and on their Recognition. As a result, foreign trusts may be difficult to enforce in Poland.

As from May 22, 2023 Polish family foundations are in place. They are very popular and frequently used as a succession planning / asset protection vehicle. Until today, more than 2500 such foundations have been established. They allow for intergenerational succession planning, separation of assets, different succession with respect to power and with respect to proceeds, professional external management while family members are minor or not competent to run business, etc.

Similarly common are  holding companies which are used as a family holding being the owner of shares in underlying assets (portfolio companies), which allows to separate family from operational business. Articles of association of such family holding companies frequently provide for special provisions regarding succession, e.g. redemption of shares in case of death, exclusion of spouses or minors from inheritance of shares, etc.

To establish a family foundation, the founder has to execute the deed of establishment and to adopt the statutes of the foundation (both in form of a notarial deed), then the list of assets needs to be drawn up, the founding capital paid in (at least 100k PLN), the governing bodies appointed (at least the management board and the meeting of beneficiaries) and the application filed with the court to register the foundation. The family foundation is a legal person and is represented by its governing bodies. Before registration in the court register, it acts as a foundation in organization (similarly to LLCs) and is then represented by the founder or by a proxy appointed by the founder.. The family foundation is a CIT taxpayer, has to draw up its financial statements, becomes the sole owner of its assets, including real estate, may employ, sue and be sued. Upon registration by the court, the family foundation gains a full legal capacity.

To establish a family holding company the shareholder has to incorporate an LLC and then contribute to the holding company shares in the portfolio companies (operating business). As a result of the above share for share exchange (tax neutrality to be verified), the holding company becomes the shareholder of the portfolio companies and the founder becomes the shareholder of the holding company. In second step, the shares in the holding company are usually subject to succession (either donations or inheritance, sometimes are also contributed to the family foundation).

Registration requirements for the above two structures, i.e. family foundation and a family holding company, are similar and include:

• registration of the entity with the registry court (Register of Family Foundations to obtain RFR number and National Court Register to obtain KRS number, respectively)
• registration of the entity with the Main Statistical Office in order to obtain REGON statistical number
• registration of the entity with the tax office in order to obtain NIP tax identification number (TIN) and VAT registration, if the entity will be a VAT tax payer
• registration of the entity with the Central Register of Ultimate Beneficiaries.

In both of the above mentioned cases, The  authorities will require the following information:

• statutes / articles of association and any changes to them,
• governing bodies and their members data,
• financial statements,
• tax returns.

In case of family holding companies all corporate documents filed with the register are available to the public without any limitations (part of those documents is available on-line).

In case of family foundations, the register is kept physically in the District Court for Piotrków Trybunalski and no on-line access is available. The register is divided into two parts: (i) the register, which is available to anyone and (ii) the foundation documents, which are available only to the founder, members of the governing bodies, beneficiaries and persons who prove to have a legal interest.

The open part of the register covers the following information:

1. name, registered seat and address, NIP and REGON numbers;
2. amount of the founding capital;
3. data of the members of the governing bodies;
4. first and surname of the founder and the address for deliveries (usually corporate address is given instead of home address to protect the privacy), if he/she is entitled to appoint the management board;
5. lifetime of the foundation, if it is limited;
6. information on the statutes and on its amendments;
7. information on performed business activity, if it is carried out;
8. information that annual financial statement was submitted (date of submission, reported year);
9. information that the report of auditor on the audit of the financial statement was submitted, if the financial statement was subject to such audit;
10. information that a resolution on approval of the financial statement and on division or coverage of net financial result was adopted;
11. information on the last day of the financial year;
12. information on appointment and revocation of a curator;
13. information on dissolution of a family foundation;
14. information on opening of restructuring proceedings, on declaration of bankruptcy of a family foundation carrying out business activity.

The documents with limited accessibility (as mentioned in point (ii) above) are as follows:

1. statutes
2. financial statements
3. resolutions of governing bodies.

Moreover, the following documents are not being filed to the court and therefore are not accessible by the third parties (however the tax authorities are entitled to request access to them):

1. the list of beneficiaries,
2. list of the assets, and
3. investment policy (if drawn up as it is not mandatory).

A family foundation has the status of a CIT taxpayer and is exempt from CIT to the extent that it carries out so-called permitted business activities, i.e. among other things:

1. joining and participating in commercial companies, investment funds, cooperatives and similar entities with registered offices in the country or abroad,
2. the acquisition and disposal of securities, derivative instruments and rights of a similar nature,
3. granting loans to companies in which a family foundations directly holds shares,
4. lease of assets.

To the extent that the family foundation carries out permitted activities, the CIT tax liability arises only at the time of payment of the cash benefit/transfer of the non-monetary benefit to the beneficiaries. The family foundation is liable to pay 15% CIT on the value of each benefit paid/transferred. That means that tax is in fact postponed to distribution.

Income received by the family foundation from business activities other than permitted activities is subject to current taxation at 25% CIT.

Lease of assets  towards related parties is a permitted activity, but it triggers immediate taxation with regular 19% CIT rate (still that tax can be credit against tax on distribution to beneficiaries).

Benefits transferred by a family foundation to the founder and to a beneficiary who is the founder’s spouse, descendant, ascendant, stepchild, sibling, stepfather or stepmother (these persons form the so-called zero tax group for exempt from inheritance and gift tax) are – if the relevant conditions are met – PIT-neutral.

If the designated beneficiaries are also individuals who do not belong to the zero tax group, the benefits or assets received by them will be subject to PIT at a rate of 10% or 15%, depending on the degree of relationship (or lack thereof) with the founder.

In Poland there is no special tax regime for a family holding company. Such a structure is taxed in the same way as any other holding company. Still, under certain conditions, Polish Holding company can benefit from participation exemption on disposal of shares (critical conditions are interrupted 2 years shareholding period of at least 10% in equity, but there are other conditions which may exclude possibility to apply that exemption.  There are also certain exemptions from dividend income. That makes Polish holding company an interesting option for individuals to locate therein their portfolio of controlled companies.

Trusts do not exist in Polish law. Poland is not a party to the Convention of 1 July 1985 on the Law Applicable to Trusts and on their Recognition. As a result, foreign trusts may be difficult to enforce in Poland. Trustees are usually treated as estate administrators, beneficiaries of the trust are treated as heirs of the settlor / founder of the trust and payments made from the trust to those beneficiaries are treated as inheritance. Problems with acknowledgement of trusts may occur when family members are not beneficiaries or when they have no claim to the trustees for the distribution from the trust.

Foreign private foundations are recognized in Poland. However, in case of different provisions abroad regarding forced heirship (especially when the period to raise the claims abroad is shorter than in Poland) may be challenged / not acknowledged before Polish courts.

There are no specific tax regulations referring to distributions from trust to trustees.

Polish tax authorities currently state that payment of cash or property rights from a trust to its beneficiary as a rule should not be treated as a gift under the Inheritance and Gift Tax (IGT). In their view such payments do not meet the requirements of a gift agreement because no agreement is made between the trust and the beneficiary which would constitute the basis for a payment while a gift under the Polish regulations should be base on the  agreement. Therefore, as the payment from a trust is not similar to a gift, it cannot be treated as one of the categories falling under the IGT. Additionally, those payments can not be recognized as other activities (events) that fall under the scope of the IGT (The IGT lays down an exhaustive list of activities (events) that shape its material scope). Still, in some specific cases tax authorities in the past. admitted possibility to apply IGT rules (and specific exemptions) to transfers from the trust..

As a result of the conclusion that the payment from the trust should not fall under the IGT, it shall be subject to PIT. Polish PIT distinguishes between a few different sources of income (e.g. the income from employment, business activity, capital gains) with one “catch-all” source called “income from other sources” that includes all the streams which cannot be qualified under either of the other sources. That is basically the case for the payments from the trust, as it does not meet the criteria of either of the other, specific sources.

Hence, as rule that kind of income is subject to a standard progressive tax rate – 12%/32% PIT (a default rate for all the sources of income which are not subject to flat-rate taxation).

Distributions from foreign family foundations are treated as subject to IGT with highest 20% rate.

Both trusts and foreign foundations, if are “effectively low taxed” in home jurisdiction and meet other specific criteria, may trigger CFC taxation at the level of founder, beneficiary or trustee, depending on level of control over the foreign vehicle. Tax burden, depending on circumstances, may be substantial and in some cases may not correspond to amount of economic profit of foreign trust/foundation. Therefore it is highly recommended to conclude a thorough tax analysis of foreign trust/foundation as in some cases it may lead to tax inefficiencies. Still, in some cases tax inefficiencies may not occur.

Trusts do not exist in Polish law. Poland is not a party to the Convention of 1 July 1985 on the Law Applicable to Trusts and on their Recognition. As a result, foreign trusts may be difficult to enforce in Poland.

Private foundations, both Polish and foreign, may be used to shelter assets from the creditors of a settlor and of a beneficiary. Assets transferred to the Polish family foundation become its sole ownership and no longer belong to the settlor (permanent separation of the ownership). However, in case of a Polish family foundation, the protection of assets does not impact the debts of the settlor that existed at the time of incorporation of the foundation. The foundation is by law jointly and severally liable for those debts, up to the amount of the assets contributed to the foundation. The same applies to alimony debts of the settlor, regardless of the time when they arose (whether before or after the incorporation of the foundation).

The title of a beneficiary of a Polish family foundation is not transferable, cannot be encumbered, seized or disposed of. Benefits from a family foundation may be transferred, encumbered, seized or disposed of. However, in practice benefits are usually made at the discretion of the foundation governing bodies and, consequently, beneficiaries are not entitled to automatic, repeatable benefits (however they might be, dependent on the regulations of the family foundation in question) . Thus, their assets (benefits coming from the foundation) are to certain extent protected.

Assets can be contributed to a family foundation and minors can then acquire certain rights, i.e. rights to benefits, right to vote in the Beneficiaries Meeting, right to be elected to other governing bodies of the family foundation, once they reach certain age, obtain certain education level, sign prenuptial agreement, etc.

Another method is to make a Will under which an adult family member becomes the heir of the estate but the Will imposes on them an obligation to transfer certain assets to the minors once they come of age (are 18 years old).

Individuals are advised to grant powers of attorney for the event of their possible mental incapacity. Although a power of attorney can in principle be granted under a condition, in practice it is avoided to include the condition as its fulfilment is difficult to prove and third parties may be reluctant to contract with such proxy who would need to produce not only the power of attorney but also pertinent medical documentation which is difficult to assess for a non-professional third party.

The government works on draft bill on personal assistance to persons with incapacities and disabilities, which should be released still in December 2024 and should come into force in the course of 2025. It is expected that this law will introduce certain legal solutions related to representation of persons with disabilities and incapacities.

Trusts do not exist in Polish law. Poland is not a party to the Convention of 1 July 1985 on the Law Applicable to Trusts and on their Recognition. As a result, foreign trusts may be difficult to enforce in Poland.

Charitable companies are not known as such in Poland. In theory, a Polish LLC or a joint-stock company can be established for any purpose which is not prohibited by law. However, in practice, commercial companies are not used for charitable purposes.

Philanthropic foundations are frequently used to address charitable purposes of individuals. There are dozens of thousands of them. To establish a charitable foundation, the following steps are required:

• the founder needs to execute the deed of establishment and the statutes, both in form of a notarial deed,
• the founder determines the assets and the purpose of the foundation,
• the founder appoints the governing bodies,
• the founder submits the application for registration of the foundation with the National Court Register; the foundation acquires its legal personality and may commerce its activity upon registration.

Philanthropic foundations are supervised by a Minister of the Polish government competent due to the activity of the foundation.

If the foundation exists for 2 years and during that period has filed with the Minister its activity report, it may apply for granting the foundation a status of a “common benefit organization” (OPP) which results in possibility to collect 1.5% of the personal income tax from persons which wish to support the foundation with part of their taxes.

Poland reports to other countries based on CRS (Common Reporting Standards) and CbC (Country by Country Reporting) reporting rules as well as to the USA based on FATCA (Foreign Account Tax Compliance Act).

CRS was introduced in the Council Directive 2014/107/UE (so called DAC2). This directive was transformed into the Polish legal system by virtue of a law dated 9 March 2017 on exchange of tax information with other countries.

December 2024 – draft bill on personal assistance is expected, no retrospective effect.

December 2024 – draft bill on civil partnership is expected, no retrospective effect.

Q2 2025 – draft bill on changes to taxation of the family foundations is expected, no retrospective effect.