Foreign loan and PCC

According to Art. 1(1)(b) of the PCC (Polish Civil Code) Act, the tax applies to agreements concerning the loan of money or items specified only by their type.

This law also defines the territorial scope of its application.

According to Art. 1(4) of the Act, civil law transactions are subject to tax if their subject matter includes:

• Items located within the territory of the Republic of Poland or property rights exercised within the territory of the Republic of Poland.
• Items located abroad or property rights exercised abroad if the acquirer has a place of residence or registered office within the territory of the Republic of Poland, and the civil law transaction was completed within the territory of the Republic of Poland.

The mere fact of agreeing with a foreign entity does not automatically exempt it from PCC taxation in Poland. In the case of a loan provided by a foreign entity, which funds are held in a bank account in a Polish bank, such an agreement is subject to PCC taxation.

Similarly, in the example where the funds are held in an account in a German bank, but the agreement with the foreign contractor is concluded in Poland, it would also be subject to PCC taxation. The crucial factor is determining the place where the agreement was concluded.

In summary, a foreign loan is exempt from PCC taxation only if the monetary funds were located abroad (in a foreign bank account), and the agreement was concluded outside the territory of the Republic of Poland, including long-distance agreements.

Author: Anita Miłek / Kurdynowski Accounting Office in Bydgoszcz

anita.milek@kurdynowski.pl    tel.: 52 321 321 5