Loan and PCC tax – what should you know about it?

What is the PCC tax? In what situations does it apply? Should income tax be deducted from the loan? Check it out. When we find ourselves in a crisis, when we urgently need an extra cash injection, we rarely think rationally. We focus on finding the amount you need as quickly as possible. We are less often interested in the consequences of making a financial commitment. Everyone is aware of the obligation to return the money. However, few realize that, in addition, some loans are taxable.

Loan and tax

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Many people, when they hear the word tax, immediately assume that the case is certainly complicated and delays in completing the formalities. The PCC tax is regulated by law from the Act of 9 September 2000 on the tax on civil law transactions, where everything is explained. According to the provisions of the regulation, taxation includes:

● contracts for the sale and exchange of things and property rights;

● money loan agreements or items marked only as to the species;

● donation agreement – in the part concerning the takeover by the recipient of debts and burdens or obligations of the donor;

● life contracts;

● inheritance division agreements and agreements on the abolition of joint ownership – in the part concerning repayments or additional payments,

● establishment of a mortgage;

● establishing paid use, including incorrect, and paid easement;

● incorrect deposit agreement;

● articles of association.

The loan loan agreement will be interesting for us. It is worth remembering that the tax does not cover every situation when we decide to borrow funds.

Tax on loans

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There are more and more diverse loan offers on the market of non-bank financial services. Many lenders have the option of adapting the amount requested and the repayment date to our needs. Despite this, many of us decide to borrow money from friends or family. The reason for this choice may be greater confidence in relatives than representatives of financial institutions, as well as the desire to eliminate the costs associated with a given commitment. However, is it possible to avoid any fees?

There will be an exception to each rule. This is also the case for taxing loans. Each liability towards a loan company is associated with additional costs in the form of commissions, interest or preparation fee. However, if we received financial support from a registered business activity, then we are released from the obligation to pay tax on civil law transactions. This applies to any amount and repayment date. The same applies to banking institutions.

PCC on loans – financial support from the family

PCC on loans - financial support from the family

According to the provisions of the Act, additional costs related to PCC do not have to worry about those who borrowed less than PLN 9,637 for a period not longer than 5 years from:

● spouses

● their descendants

● other family members

● related persons – that is, connected with us by family relationships as a result of marriage, including in-laws, son-in-law, stepson

If we decide on any other amount exceeding PLN 9 637, the situation looks slightly different.

● For family members, stepchildren, stepfather, stepmother and spouses, we can take advantage of the option to receive any amount without tax. Provided that a declaration on the tax on civil law transactions is submitted within 14 days (form PCC-3). In this case, you will need to enter a zero in the appropriate field ‘calculated tax amount’.

● However, the taxation obligation was extended to higher-value financial support granted by parents-in-law, son-in-law or daughter-in-law.

Loan tax – friends

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Borrowing money from friends is also one of the most popular solutions in the absence of funds for unforeseen expenses. It can be said that we pay back as much as we borrowed and nothing else interests us. However, only in a situation clearly defined by the Act on tax on civil law transactions:

● If in the next 3 calendar years the cash received from one person does not exceed the value of 5000 zlotys or 25,000 zlotys from several, then we can sleep peacefully.

Loan tax – in the company and in other cases

Many corporations choose to loan a certain amount from partners who have savings accumulated in the form of personal assets. In this situation, we do not have to worry about the PCC tax, because under the Act on the tax on civil law transactions, we are released from it.

It is also worth mentioning the other cases listed in the Regulation.

● When financial support is provided to us by an entrepreneur conducting a loan business who does not have a registered office or management board in Poland, we also do not have to pay tax.

● In the event that the source of financial resources are cash registers or company funds, employee loan and credit unions, cooperative savings and credit unions, buddy savings and loan associations of a military nature, and company social benefit funds, trade union funds.