When we need money, borrowing it from family is a common situation – it is easier and simpler than loans from various institutions. Pursuant to the Act on tax on civil law transactions (PCC), a money loan is taxed. However, you can benefit from certain tax exemptions.
PCC tax on money loans – when and how much do you have to pay?
The obligation to tax on civil law transactions occurs on the date:
- concluding a loan agreement (also orally),
- payment of money (when it occurs several times and the total amount is not known at the time of concluding the contract),
- the taxpayer's reference to the fact of concluding a loan agreement.
Generally, the tax on civil law transactions is 0.5%. the amount of money borrowed. It must be paid in tax office within 14 days from the date of conclusion of the loan agreement. By this date, you must also submit a declaration regarding tax on civil law transactions (PCC-3). If we conclude such an agreement before a notary, he is obliged to collect the tax and pay it to the tax office.
Family money loans – PCC tax exemption. Who is entitled to it and what conditions must be met?
Loan of money up to PLN 36,120 (from July 1, 2023: tax-free amount from inheritance and donations) is exempt from PCC tax. In such a situation, there is no need to submit a PCC-3 declaration, and the money can be transferred in cash. However, if we want to borrow more, several conditions must be met to be tax exempt. You must submit the PCC-3 declaration to the competent tax authority within 14 days from the date of conclusion of the contract and document receipt of the borrowed money into the bank account. The PCC tax exemption applies to a loan from the immediate family, i.e.:
- spouse,
- children, grandchildren, great-grandchildren,
- parents, grandparents, great-grandparents,
- stepson,
- siblings,
- stepfather and stepmother.
Please remember that if a PCC declaration is not submitted after 14 days from the date of conclusion of the contract, the tax exemption is lost. Then you have to pay 0.5%. tax on the amount borrowed.