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When is the loan released from PCC?

Ever wonder what the PCC tax is? Is there any chance, therefore, that this tax will not be paid? What does it look like in the context of exemptions from these deductions and what is it all about?

Obliged to pay a tax of 2%


Let’s start as always from the very beginning. In accordance with art. 7 section 1 point 4, we learn that a person taking out a PCC loan is obliged to pay a tax of 2% on the interest rate basis. In this case, the basis is the amount or value of the loan . It is worth mentioning in this element that there are conditions in which this tax does not have to be paid. Let us explain, therefore, when the loan is exempt from fees called PCC.

Tax base and for obvious reasons


The loan agreement is taxed with the so-called tax on civil law transactions. As we have already mentioned, it currently amounts to 2% of the tax base and for obvious reasons – is borne by the borrower. Interestingly, this tax can also be a multiple of this percentage (e.g. 20%). Such a high percentage is associated with a situation in which our obligation will not be met by us.
Taxes are also subject to specific changes, which are mentioned in the contracts. The obligation is bound at the time of the civil law transaction, but is subject to several exceptions, which remove this obligation.

Here they are:

  1. From art. 9 point 10 lit. b of the PCC Act, the exemption covers loans from our immediate family, indicated. This term is understood to mean various people – min. spouses, descendants and ascendants (grandparents, parents, grandchildren, great-grandchildren), as well as siblings. The time limit for release must be made and submitted within 14 days of receipt of the loan
  2. If the loan is lower than USD 9,637 within 5 years – it is tax-free immediately.
  3. maintenance loans
  4. loans related to social or health insurance, as well as any entitlements related to people with disabilities.
  5. loans in defense, science, education and health matters
  6. transactions subject to VAT

In the case of private individuals, we can distinguish situations such as:

  1. Loans granted by entities belonging to a tax group other than I. This amount may not exceed USD 5,000 over 3 years. The total amount of support cannot exceed 5 times this amount (i.e. USD 25 thousand).
  2. Loans from cash registers or company funds or the so-called employee loan and assistance funds
    It is also worth mentioning that the tax exemption applies to loans granted by the so-called business entities, when their work is related to providing financial assistance (i.e. loans or credits), whose registered office is not located in the country.

What is taxable?


Following the blow, let’s determine when the PCC tax applies. It is obvious that this obligation relates to situations not mentioned above. Taxable it applies to civil law transactions in which the subject is: an item located within the territory of the country; property rights exercised throughout the country; property or property law abroad when the buyer has a home address in the country

So summarizing the above information. There are additional costs associated with the loan, which we understand as interest and commissions. Most of them are connected with paying 2% of PCC tax, which of course should be checked and analyzed. In this element, it is worth answering the question whether the taxation to which we are subject concerns PCC or VAT. If the loan is exempt – check if there are no hidden terms.