The loan is an external source of financing and an instrument that can be freely used to achieve various objectives. You can take it in a bank, in a non-bank company, but also from your family members. However, you need to know how much you can borrow from a family without tax and how a loan agreement should look like from your family.

A loan from the family

A loan from the family

The Civil Code allows for the possibility of borrowing money from loved ones. Loans in the family happen quite often, but not all are reported to the tax office. This is a big mistake, because according to the law, each loan is associated with the need to tax it.

Loans in the immediate family of up to PLN 9,637 from one person within 5 years, as a rule, do not have to be reported and will not be taxed. Higher loans above the indicated amount may also be tax-free but must be documented and reported to the tax office within a reasonable time.

Tax on loans in the family

Tax on loans in the family

Although, according to the Civil Code, each loan is subject to a civil law tax of 2 per cent, exceptions to the immediate family exist from this rule. When a loan is taken by parents or grandparents and its amount does not exceed PLN 9,637 per person in 5 years, it does not have to be taxed. The closest family are:

  • spouse,
  • descendants – children, grandchildren and great-grandchildren,
  • introductory – parents, grandparents and great-grandparents,
  • stepson and stepdaughter,
  • siblings,
  • stepfather and stepmother,
  • in-laws.

So if we get a loan from a brother, mother or grandmother for 9637 PLN, you do not have to tax it with PCC tax and document it in any way. A visit to the tax office or submission of declarations is not required.

With loans from the immediate family to a higher amount, you can avoid paying a tax of 2 per cent. loan amount if:

  • PCC-3 will be declared on the tax on civil law transactions to the competent tax authority within 14 days from the date of the action,
  • the loan is credited to a bank account or postal order.

An exception here are loans between parents-in-law, son-in-law and daughter-in-law. Such a privilege does not apply to them and over PLN 9,737 should be paid 2%. tax. Failure to comply with this obligation may result in an irregularity being detected by the tax office that a tax-payer will be subject to a 20% tax on civil law transactions. Therefore, it is better to make a loan earlier in order not to expose yourself to unpleasantness and financial losses. It is also good for the safety of both parties – the borrower and the lender, sign a loan agreement.