Summer is not only a time for holiday trips and relaxation. It is also a time for weddings, christenings and other family celebrations. When organising such an event, we incur considerable expenses, but that is not all. Ultimately, after the event, we often have a substantial sum of money from the “envelopes” received from guests. Alternatively, we may receive a valuable gift. This is where the question arises… should we report such income to the tax authorities?
We treat received gifts or money as donations. The Inheritance and Gift Tax Act states that funds transferred to us by others do not have to be reported to the tax authorities if they do not exceed the specified thresholds. The tax-free allowance varies and depends on how closely related we are to the donor. If the value of payments from an unrelated person belonging to tax group III does not exceed PLN 5,733 over a five-year period, that is, the tax-free allowance for donations, no tax is charged on such a donation. In the case of tax group II, which includes, for example, our parents’ siblings, our sister’s children and our brother’s grandchildren, the amount is PLN 27,090. From our close relatives, however, such as a spouse, children, parents, stepchild, son-in-law, daughter-in-law, siblings, stepfather, stepmother or parents-in-law—that is, from tax group I—we may receive PLN 36,120 without reporting it.
It should also be remembered that these amounts apply to a five-year period. Therefore, if we receive donations from a given person from time to time, we should add up their value and, if the limit is exceeded, report the donation to the tax office. The tax rate then depends on the degree of kinship and the amount of the donation received. Thus, we consider each wedding guest separately and verify whether we have received donations from them exceeding the tax-free amount specified in the Act.
Let us remember that gifts received from immediate family members, the so-called zero tax group—for example, children, parents, grandparents, siblings, stepfather, stepmother and others—will not be subject to tax regardless of the amount of the donation, provided that certain conditions are met. Namely, within six months of receiving the gift, the recipient must submit a declaration of receiving the donation to the appropriate tax office, and the donation must be transferred to the recipient’s bank account or sent by postal order to the recipient’s address. A gift given in cash will not be exempt from tax in such a case.