The IRS verifies household loans – no notification results in 20% penalty!

In 2025 Tax Office tightened control over household loans. Failure to study specified transaction through the form PCC-3 may consequence in an application 20% criminal tax. This means that persons who neglect to comply with the notification work may be subject to crucial additional costs.

Obligation to submit a household loan

Under the civilian Law taxation Act (PCC), loans granted by members of the immediate household are, in principle, exempt from tax, provided that they are duly reported to the taxation office. To benefit from the exemption, the borrower must make a declaration PCC-3 time 14 days from the conclusion of the debt agreement. Failure to make a declaration within this period results in the failure of the exemption and the work to pay a standard taxation rate of 0.5% the value of the loan.

Sanctions rate 20%

In cases where the debt is not notified at all and the taxation office finds out about it in the course of the audit, the alleged ‘ sanctioning taxation rate tallness 20% the taxation base. This means that alternatively of standard 0.5%the borrower will be obliged to pay 20% the value of the loan. For example, with a debt of an amount PLN 50,000, failure to notify it would consequence in an additional taxation of PLN 10,000.

Tax Office

Exceptions and exemptions

However, there are exceptions to the general principles. Loans between closest household members, specified as spouses, parents, children, siblings, in-laws, sons-in-law or daughter-in-law, shall be exempt from taxation up to the amount 36 120 PLN. In that case, it is not required to submit a PCC-3 declaration or to transfer the taxation to the taxation office. However, it is crucial that the value of the loans granted by the same household associate in a given year and during the erstwhile 5 years does not exceed that amount.

PCC-3 declaration procedure

In order to decently study the debt and benefit from the exemption, it is essential to:

1. Download PCC-3 form: It is available on the taxation Portal (taxes.gov.pl) in the section "Print Forms".
2. Fill in the form: supply details of the borrower and lender, the value of the debt and another information required.
3. Declaration: This can be done in individual at the taxation office, send by post or electronically via e-Declarations system.
4. Deadline for submission: Declaration must be made within the time limit 14 days from the conclusion of the debt agreement.

Please note that the late submission of the declaration, even by 1 day, results in the failure of the exemption and the work to pay a taxation of 0.5%.

Consequences of non-declaration

Failure to submit a PCC-3 declaration within the time limit or no debt notification results in:

• Obligation to pay tax: 0.5% or 20%, depending on the situation.
• The anticipation of imposing a financial penalty: In the form of a fine for a taxation offense.
• Obligation to pay interest on late payment: From the date on which the taxation should have been paid.

In 2025, the maximum punishment for failing to submit a PCC-3 declaration shall be 93 320 PLNwhat constitutes 20 times minimum wage for work.

Recommendations for borrowers

In order to avoid the unpleasant consequences of not submitting a PCC-3 declaration, it is recommended that:

1. Timely submission of declarations: Always within 14 days of the conclusion of the debt agreement.
2. Documenting transactions: retention of the debt agreement and evidence of transfers of funds.
3. Consultation of the taxation adviser: In case of doubts regarding taxation obligations.