Poland: Tax authorities clarify real estate and inheritance rules

The Director of the National Tax Information (KIS) in Poland has issued interpretations that clarify the taxation of real estate transactions involving land swaps and inherited property.

In one case, a man attempted to exchange land for four apartments with a developer. While the individual argued the transaction was a private sale of assets held for over five years, the KIS ruled it constituted business activity. The tax authority cited preparatory actions—such as obtaining building permits, architectural designs, and land conversion—alongside the individual's prior sale of 11 apartments as evidence of organized, profit-seeking commercial activity.

In a separate matter regarding inheritance, the KIS clarified the five-year rule for income tax exemptions. A widow sought to sell shares in a property inherited from her husband without paying tax, arguing the family had owned the home for over 50 years. However, the KIS ruled that the five-year period must be calculated from the end of the year in which the deceased spouse acquired their specific share, rather than from the original date of acquisition by previous generations.