Polish tax authorities have ruled that a car gifted by a church entity is exempt from inheritance and donation tax, provided it isn’t used for business.
Tax Exemption for Church Donations
Individuals receiving a gift, such as a car, from a church legal entity will not be subject to inheritance and donation tax if the item isn’t used for commercial activities. This was confirmed by the Director of the National Fiscal Information in an individual interpretation.
The ruling stemmed from a question regarding the donation of a passenger vehicle. The recipient referenced Article 55, paragraph 6, point 1 of the Act on the Relationship between the State and the Catholic Church in Poland, dated May 17, 1989.
Details of the Tax Law
This provision grants church legal entities exemption from inheritance and donation tax, and from the civil law acts tax, when acquiring or disposing of property not intended for business. It’s important to note that when a church entity donates property (like a car), the recipient, not the church, is typically responsible for the tax.
Ruling on Recipient’s Tax Obligation
The recipient argued that the exemption applied to both parties involved in the transaction, including the recipient of the donation. The Director of the KIS agreed with this position.
The Director clarified that the exemption under Article 55, paragraph 6, point 1 applies when a church legal entity is a party to the transaction and the donated item, such as a car, is not used for business purposes. If both conditions are met, the recipient can avoid the donation tax.
Legal Basis
Individual interpretation of the Director of KIS dated April 3, 2026 (file number 0111-KDIB2-3.4015.81.2026.1.LM).
