Related parties within capital groups often transfer various assets between themselves, taking advantage of better financial terms resulting from their links. One of the most common forms of such transfers is a loan of money, which may be subject to the tax on civil law transactions (PCC – podatek od czynności cywilnoprawnych). Understanding the PCC rules for related parties is key to settling taxes correctly and avoiding unnecessary tax burdens.
The Act on the tax on civil law transactions (consolidated text: Journal of Laws (Dz.U.) 2026, item 191) does not provide for any special rules for related parties, which means that the same rules apply to them as to unrelated parties. However, there are certain exclusions and exemptions that can be particularly important for transactions between entities belonging to the same capital group.
Other forms of asset transfer are subject to the general rules: the sale of movable property and real estate – 2%, the sale of other property rights (e.g. shares) – 1% (Article 7(1)(1)), and a contribution to a company or an increase in share capital – 0.5% as a company agreement or its amendment (Article 1(1)(1)(k) and (3), Article 7(1)(9)). The exclusion for transactions covered by VAT does not apply to a company agreement, but PCC does not apply, among others, to a contribution to a capital company, in exchange for its shares, of the business of a capital company or an organised part of it, or of shares in another capital company giving a majority of votes (Article 2(4) and (6)(c)). The rest of this article deals with the most common form – loans.
Basic rules for taxing loan agreements with PCC
Under the Act on the tax on civil law transactions, an agreement for a loan of money or of things identified only by type is subject to this tax under Article 1(1)(1)(b). This means that any loan agreement, whether concluded between related or unrelated parties, may potentially be subject to PCC.
Under Article 720 § 1 of the Civil Code, the essential elements of a loan agreement are the lender's obligation to transfer ownership of a specified amount of money to the borrower and the borrower's obligation to return the same amount of money. These basic elements must be met for a transaction to qualify as a loan agreement
Civil law transactions included in the closed list set out in the Act are subject to the tax on civil law transactions if they meet the conditions set out in Article 1(4) of that Act. These conditions relate primarily to where the subject of the transaction is located, the place of residence or registered office of the acquirer and the place where the transaction is carried out.
Territorial conditions for PCC
Loan agreements are subject to the tax on civil law transactions in the following situations:
- When the subject is things located in Poland or property rights exercised in Poland
- When the subject is things located abroad or property rights exercised abroad, but the acquirer has its place of residence or registered office in Poland and the transaction was carried out in Poland
Loans are subject to PCC if the money is located in Poland when the agreement is concluded. In that case, it does not matter where the agreement was concluded or where the parties have their place of residence or registered office. What matters is where the money that is the subject of the loan is located
If the money that is the subject of the loan is located abroad, the agreement may still be subject to PCC if the borrower has its place of residence or registered office in Poland and the transaction is carried out in Poland.
Who must pay the tax
Under Article 4(7) of the PCC Act, the tax obligation for a loan agreement rests with the borrower. This means that the entity receiving the money must calculate, declare and pay the tax on civil law transactions.
Under Article 6(1)(7) of the PCC Act, the tax base for a loan agreement is the amount or value of the loan. For agreements stating that the money will be paid out in instalments and the total is not known when the agreement is concluded, the tax base is the amount of each payment
The tax rate for a loan agreement is 0.5% of the tax base under Article 7(1)(4) of the PCC Act. This rate applies to loan agreements whether they are concluded between related or unrelated parties. Exception: if the taxpayer relies on the loan before the tax authority (during verification activities, an audit or proceedings) and the tax has not been paid, the rate is 20% (Article 7(5)).
Specific features of related parties in the context of PCC
The Act on the tax on civil law transactions does not refer in any way to links between parties within the meaning of the income tax rules. This means that concluding a loan agreement between related parties does not change who is liable for PCC.
Related parties within the meaning of the income tax acts are usually companies belonging to the same capital group, where one company controls the other or both are controlled by the same entity. Despite their capital or organisational links, each entity remains a separate taxpayer of the tax on civil law transactions.
The taxpayer required to settle PCC at 0.5 percent is still the borrower, regardless of whether there are links between the parties to the agreement. Capital links do not affect PCC obligations
In practice, this means that a company receiving a loan from a related party must:
- Check whether the loan agreement is subject to PCC
- Calculate the tax due on the value of the loan received
- File a tax return within 14 days of concluding the agreement (Article 10(1))
- Pay the tax due within the same deadline
Exclusions from PCC – key for related parties
The Act on the tax on civil law transactions does, however, provide for situations in which a legal transaction falling within the scope of the Act is not taxed. The exclusion in Article 2(4) of the PCC Act is particularly important for related parties.
Under this provision, civil law transactions other than a company agreement and its amendments are not subject to the tax to the extent that they are subject to VAT, or if at least one of the parties is exempt from VAT on that transaction (Article 2(4)(a) and (b)). However, this exclusion has certain exceptions, among others for agreements for the sale and exchange of real estate and for the sale of shares in commercial companies. VAT exemptions themselves can be very narrow — one example is the VAT exemption for importing goods of no commercial value.
Conditions for applying the VAT exclusion
What matters is not whether the parties to the agreement have VAT taxpayer status, but solely whether the specific transaction is subject to VAT or at least one of the parties is exempt from that tax on that transaction.
Under Article 43(1)(38) of the VAT Act, granting loans as part of business activity is a VAT-exempt transaction. This exemption is key to excluding a loan agreement from PCC
In its judgment of 24 June 2016 (II FSK 1493/14), the NSA (Supreme Administrative Court) explained that neither an entity's formal status as a registered taxpayer nor the fact that a transaction was carried out repeatedly or once can determine taxation without establishing in each case the taxpayer's role in relation to the specific transaction.
Applying the exclusion in practice
As a result, if granting a loan is an interest-bearing loan and falls within the transactions subject to VAT as a supply of services for consideration under Article 8(1) of the VAT Act, but at the same time is covered by the exemption in Article 43(1)(38) of the VAT Act, the transaction is excluded from PCC.
This means the following line of reasoning:
- Check whether the loan agreement is for consideration (interest-bearing)
- Establish whether it is a supply of services within the meaning of the VAT Act
- Verify whether it is covered by the exemption in Article 43(1)(38) of the VAT Act
- Apply the PCC exclusion under Article 2(4)
PCC exemptions for asset transfers
In addition to exclusions, the PCC Act also provides for tax exemptions that can be particularly important for related parties. The most important for asset transfers between related parties are the exemptions in Article 9(10)(a) and (i) of the PCC Act. Under point (i), a loan granted to a capital company by its shareholder is exempt – for example by a parent company to a subsidiary. This does not cover loans between sister companies or a loan granted by a company to its shareholder. A loan granted by a partner to a partnership is treated as an amendment to the partnership agreement (Article 1(3)(1)) – the 0.5% tax is then paid by the partnership, and in a civil law partnership (spółka cywilna) by its partners (Article 4(9)). Where VAT applies instead of PCC, the current VAT rates in Poland become relevant.
Exemption for foreign lenders
Under Article 9(10)(a) of the PCC Act, loans granted by entrepreneurs without a registered office or management in Poland who conduct business in lending and granting loans are exempt from the tax.
For this exemption, the lender's legal form does not matter – only the fact that it conducts lending and loan activity. Such activity should be conducted under the legal rules in force in the lender's country
This exemption is particularly important in international capital group structures, where a parent company or another group company based abroad grants loans to Polish entities in the same group.
Position of the tax authorities
The possibility of applying the PCC exemption to a loan agreement concluded by a company with a related party was addressed by the Director of the Tax Chamber in Warsaw in a ruling of 16 November 2010 (no. IPPB2/436-321/10-3/AF).
In the case presented, the loans were granted by a lender based in the USA. The lender was not a bank, but in fact conducted business consisting, among other things, of regularly granting loans to entities belonging to the same capital group. The tax authority stated that if the loan agreements were not within the scope of the VAT Act and were subject to PCC, the exemption in Article 9(10)(a) of the PCC Act would apply.
This ruling confirms that related parties can use the exemptions provided for in the PCC Act on the same terms as unrelated parties, provided they meet the conditions set out in the law.
Analysis of practical cases of asset transfers
In business practice, related parties use various forms of asset transfer, which can have different PCC consequences. The most common cases are:
Interest-bearing loans between related parties
For interest-bearing loans between related parties, it is key to establish whether the transaction is subject to VAT or exempt. If the lender conducts business and granting loans falls within that business, it will usually be a VAT-exempt transaction under Article 43(1)(38) of the VAT Act.
As a result, such a loan will be excluded from PCC under Article 2(4) of the PCC Act, because one of the parties (the lender) is exempt from VAT on that transaction.
Interest-free loans between related parties
Interest-free loans are not a supply of services within the meaning of the VAT Act, because they are not for consideration. In that case, the exclusion in Article 2(4) of the PCC Act cannot be applied and the loan will be subject to PCC at 0.5%.
Interest-free loans between related parties are in principle subject to PCC, unless another exemption provided for in the Act can be applied. The most commonly used are the exemptions in Article 9(10)(i) (a loan from a shareholder to a capital company) and Article 9(10)(a) (foreign lenders conducting lending activity)
Asset transfers in the form of foreign currency loans
Foreign currency loans between related parties are subject to the same rules as loans in Polish złoty. The tax base is the value of the loan converted into Polish złoty at the average NBP (National Bank of Poland) exchange rate on the day the agreement is concluded.
For foreign currency loans, it is particularly important to establish where the money is located when the agreement is concluded, because this affects the territorial conditions for PCC.
Comparison of different forms of asset transfer
| Form of transfer | PCC rate | VAT exclusion possible | Special exemptions |
|---|---|---|---|
| Domestic interest-bearing loan | 0.5% | YES - Article 43(1)(38) VAT Act | YES - Article 9(10)(i) (from a shareholder of a capital company) |
| Domestic interest-free loan | 0.5% | NO | YES - Article 9(10)(i) (from a shareholder of a capital company) |
| Loan from a foreign entity | 0.5% | YES - Article 43(1)(38) VAT Act | YES - Article 9(10)(a) |
| Foreign currency loan | 0.5% | As for a loan in złoty | As for a loan in złoty (point (a) or (i)) |
| Trade credit (deferred payment) | Not applicable | Not applicable | Not a loan – not on the list in Article 1(1) |
PCC procedures and obligations
Related parties concluding loan agreements must follow certain procedures and deadlines relating to the tax on civil law transactions. These obligations are identical to those for unrelated parties.
Deadlines and settlement procedures
The borrower must:
- File the PCC-3 return (the PCC tax return) within 14 days of the transaction (with several payments whose total is not known in advance – from each payment, Article 3(1)(1a); with at least three loans within 14 days, a summary return can be filed by the 7th of the following month, Article 10(1a)). Preparing the PCC-3 is also covered by our accounting services.
- Pay the tax due within the same deadline
- Keep the documentation relating to the loan agreement
The PCC-3 return must contain all relevant information about the loan agreement, including the parties' details, the value of the loan, the date of the agreement and the calculation of the tax due. Errors in the return may result in additional tax liabilities
Documentation and evidence
Related parties should take particular care to document loan transactions properly, because tax authorities may analyse transactions between entities in the same capital group more closely.
The necessary documentation includes:
- The loan agreement with all annexes
- Documents confirming the transfer of funds
- Documentation on interest (if applicable)
- PCC-3 tax returns
- Documents confirming payment of the tax
Tax planning under the PCC rules
Related parties can legally reduce their PCC burden by structuring transactions properly and using the available exclusions and exemptions – provided that these reflect how the transaction actually takes place.
Using the VAT exclusion
The most common way to keep a loan outside PCC is the exclusion in Article 2(4) of the PCC Act – when granting the loan is exempt from VAT. This requires the following conditions to be met:
- The loan must be interest-bearing (for consideration)
- The lender must act as a VAT taxpayer in this transaction
- Granting loans must fall within the lender's business activity
- The transaction must be covered by the exemption in Article 43(1)(38) of the VAT Act
Using exemptions for foreign entities
In international capital structures, it is worth considering the exemption in Article 9(10)(a) of the PCC Act by properly structuring the lending activity of the foreign entity.
A foreign entity granting loans to related parties in Poland can use the PCC exemption if it actually conducts lending activity in accordance with the law of its country of registration. A banking licence is not required, but lending activity must be conducted on a regular basis
The key elements of this strategy are:
- Creating or separating within the group structure an entity responsible for financing
- Ensuring that this entity actually conducts lending activity
- Properly documenting the nature of its activity in accordance with the law of its country of registration
- Regularly granting loans as part of its business activity
Most common mistakes and pitfalls
Related parties often make typical mistakes when settling PCC, which can lead to additional tax liabilities and sanctions.
Wrong assumptions about related parties
The most common mistake is assuming that capital or organisational links automatically exempt the parties from paying PCC. The PCC Act does not provide for any preferences for related parties, so each transaction must be analysed under the general rules.
Incorrect application of exclusions
Another common mistake is applying the exclusion in Article 2(4) of the PCC Act incorrectly. Entities often wrongly assume that simply being a VAT taxpayer automatically excludes a transaction from PCC, whereas what matters is whether the specific transaction is subject to VAT or exempt from it.
Documentation problems
Related parties sometimes neglect their documentation obligations, assuming that intra-group transactions will not be audited. In fact, tax authorities often analyse transactions between related parties particularly closely.
Practical example: Company A, part of an international capital group, received an interest-free loan from sister company B in the same group (B is not a shareholder of A, so the exemption in Article 9(10)(i) does not apply). Company A wrongly assumed that, because of the capital links, the transaction was not subject to PCC. In fact, as the borrower, it should have paid tax of 0.5% of the loan value within 14 days of concluding the agreement. Failure to pay the tax resulted in default interest after a tax audit, and had the company relied on the loan before the authority without paying the tax, the rate would have been 20% (Article 7(5)).
