Gdańska - Kamienice, by Marcin Polak,
TAX ISSUES — IN POLAND AND ABROAD
Obligations in Poland (based on current Polish Law, as of January 2016)
Q. What are the tax obligations
in Poland of successful claimants?
A. Persons who recover Expropriated assets in Poland (successful
claimants) are not
required to pay income tax in
Poland on the value of the assets they recovered.
when successful claimants are the heirs of former owners, after
recovery they are required to pay succession
tax (inheritance tax) in Poland.
Q. What is the rate of
succession tax in Poland?
A. In Poland, the rate of succession tax depends on the heir's
relationship with the
immediate legal predecessors. The closer this
relationship, the lower the tax rate. If the inheritance goes through
several steps (such as from great-aunt to grandfather to father and
finally to his daughter — the present heir) the applicable tax rate is
determined by father-daughter family relationship, the father being the
The lowest rate (Tax Group 1 in Poland) applies to inheritance from
parents, siblings, spouses, etc. Except for very small amounts, on
which no succession tax applies, the rate of
succession tax in Group 1 is 7% of the value of inheritance.
In the event of immediate (direct) inheritance from more distant
relatives (Tax Groups 2 and 3), succession tax may be to 12% or even
To repeat, the tax group is based on the last succession in sequence,
which usually is from one’s parents. Therefore, 7% is the most common
rate of succession tax.
Q. What are tax
obligations in Poland of successful claimants who earn income from
assets they recovered?
A. As in other jurisdictions, they have to pay in Poland income tax on
related net income.
Q. What are tax
Poland of successful claimants
who monetize recovered assets and transfer funds
A. There are no taxes in Poland in connection with the transfer of
Q. Are payments which claimants
made for the purpose of recovering inherited assets tax deductible in
A. It depends. Some such payments are tax deductible in Poland.
We will post more information on related Polish taxes
Obligations in USA
We received the following general accounting information from Mr. R.
Lackner, CPA of Consulting For Results LLC (www.consultingforresults.com)
in this matter. IMPORTANT:
This is only general information for orientation purposes. Claimants
should consult Mr. Lackner or their own tax advisors.
Q. How should successful
American claimants report in the USA the assets they
recovered in Poland?
A. If successful claimants are former owners who have recovered assets
taken away under Communism, they are not
required to pay succession tax in the USA.
If successful claimants are heirs of former owners,
they may have to pay US federal and state inheritance taxes on these
This depends on whether they have utilized the lifetime exemptions
available under the Internal Revenue Code (IRC) and under the tax codes
of the US State they reside in.
Q. What are the tax obligations
in the USA of successful claimants concerning
income they earned in Poland from the recovered assets?
A. They have to pay income tax in the USA on related net income.
However, under the treaties to avoid double taxation between USA and
Poland, they can offset the income tax they paid in Poland against the
income tax payable in the USA.
Q. Can successful American
claimants deduct the taxes they paid in Poland from the taxes they pay
in the USA?
A. In calculating the Polish inheritance for US tax purposes, they can
deduct the inheritance tax they paid in Poland.
As mentioned above, they can also offset from their US income tax the
income tax they paid in Poland. Specific rules may apply.
Q. Are costs incurred by
American claimants to recover assets in Poland deductible from taxes
they pay in the USA?
A. This may depend on circumstances. Generally, expenses incurred in
expectation of earning income are tax deductible in the USA.
Notably, in Poland, a claim to reverse expropriation of a property
generally includes a claim for lost income from that property for the
last 10 (ten) years. In circumstances where there is a reasonable
expectation of recovery of such lost income, the expenses born by
American claimants for the purpose of recovering Polish assets, should
be tax deductible in the USA.
We will post more information on related American taxes
Obligations in Canada
Canadian tax obligations of successful claimants and rights of Canadian
claimants to deduct costs they incurred to recover assets in Poland,
are similar as those of American claimants. Claimants should consult
their own tax advisors.
Łódź- Piłsudskiego Centrum Biznesu (Piłsudskiego Business Centre),
By Nemo5576 (Own work), via Wikimedia