Do you need money and are considering a loan? This is a great way to support your household budget, especially if you have found yourself in a difficult financial situation. You want to avoid additional fees in the form of interest, so you've decided to borrow money from someone you trust. However, did you know that any loan agreement is taxable? Find out more about the tax on civil law transactions. When you borrow money from a bank or loan company, you are exempt from having to pay tax. However, the situation looks different if you decided to use another individual's money. Then you have to reckon with the fact that you are obliged to pay tax, and not doing so can cost you a lot! Check what a private loan entails. Private loan costs Borrowing money from family or friends is very popular. This step is often taken by people who cannot get money in a bank, for example, or who want to save money and not pay for interest. Do you think that borrowing from your loved ones does not cost anything? Nothing more mistaken. In such a situation you are obliged to pay a tax on civil law transactions. According to the law, a loan agreement is taxed at 0.5% of the borrowed amount. As a borrower you are obliged to submit an appropriate statement to the tax office competent for your place of residence no later than 14 days from the date of conclusion of the agreement. A document confirming the payment is also necessary. This can be, for example, a bank statement or a postal receipt. If you do not report the debt to the tax office on time and it is discovered, you will have to pay a loan tax of 20% on the amount borrowed. Who is exempt from the tax on civil law transactions? There are some exceptions regarding the loan tax. This is the case if you decide to borrow money from people in the first tax group. This group includes current spouses, parents, grandparents, children, grandchildren, siblings, stepchildren, stepfather, stepmother. In this situation, the maximum loan amount can be as much as the tax-free amount, i.e. PLN 9,637. This does not, however, exempt you from the need to report the loan to the appropriate authority. With one person from your closest family you can get into debt for less than 10 000 PLN once every 5 years. The situation is different when you want to borrow money from friends or extended family. In this case you will have to pay tax unless you borrow: ● a maximum of PLN 5,000 from one person or PLN 25,000 from different people within 3 calendar years, ● money from employee funds, trade union funds, etc. You are also exempt from tax if you go into debt to a loan company. You can find a wide selection of loans with attractive conditions e.g. here: https://lowcachwilowek.pl. How to properly conclude a private loan agreement? The loan agreement protects not only you as a debtor, but also the lender. It is also worth concluding it when it comes to transferring funds between close family members. It helps avoid claims and conflicts, which can be significant especially in sensitive family relationships. The agreement should be drawn up on paper and is necessary in situations where the loan is for more than 500 PLN. However, it does not have to be notarized. A properly written loan agreement contains information about: ● the amount of the debt and the duration of the loan, the date and place of concluding the agreement, ● the method of repayment of the debt and the rules of conduct in the event of non-payment, ● personal details and signatures of both parties. Once the agreement is made, make sure you get confirmation that the money has been transferred. Ideally, the lender will make a wire transfer or have it sent by postal order. Then you have to go to the tax office, fill in the PCC declaration, calculate the tax yourself and pay it. Remember that you only have 14 days to voluntarily report the loan. Otherwise you will be fined 20% tax. Do not delay! Fill out the declaration and report your loan to avoid additional problems. Tags banking finance loan loans
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