Do you have cash at home? The IRS can request 75% taxation – this is erstwhile and why

In the face of increasing economical uncertainty, Poles increasingly retreat savings from banks and place them in their own homes. Although the specified retention of cash is not illegal, under certain circumstances it can draw interest from the taxation office. In utmost cases, the taxation is entitled to charge 75 % tax from undisclosed sources of income. erstwhile can keeping money in a safe end up in control and serious problems?

Poles return to cash. Banks lose confidence

The anxiety caused by the instability of the financial strategy and inflation makes more and more people choose to save savings outside banks. They are popular home armored safes and cash registersthe sales by experts are record-breaking. Estimates say that in Polish households it may even be hidden several twelve billion PLN.

The origins of this trend are several:

• memory denominations and bankruptcys of banks from the 1990s,
• Concerns about possible savings tax,
• increasing awareness that electronic transactions are monitored,
• Central banks messages in Europe recommending keeping part of the cash in case cyber attacks or failure of banking systems,
• desire immediate access to money in crisis situations.

Is it legal to keep cash at home?

Yeah. Polish law does not prohibit the retention of cash at home. Moreover, there are no quota limits in this respect. A natural individual may keep it in a safe without any notification Ten thousand, 100 thousand, and even a million dollars..

Except for entrepreneurswho are required to paper transactions above PLN 15,000 Transfer. Otherwise, expenditure cannot be considered as the cost of obtaining income.

When does cash rise suspicions about the tax?

Even though having money at home is legal, their unexplained origin may lead to serious consequences. The taxation office may initiate a review procedure where:

• lifestyle does not correspond to declared income (e.g. individual with a wage of PLN 3 1000 buys property for cash),
• there is simply a abrupt increase in assets not supported by authoritative sources of income,
• large cash purchases are carried out (car, jewelry, apartment).

In specified cases, the taxation may fishy that the money comes from Undisclosed gross sourceswhich is the basis for launching the alleged proceedings for undisclosed revenue. If the audit shows a discrepancy between the declared income and the real estate, the payer must prove the legality of the measures.

75 percent taxation – erstwhile does it threaten?

Where the taxable individual cannot show the legitimate origin of the measures, the taxation office may impose a flat-rate taxation of 75%. Irregular revenue. This is 1 of the the highest sanctioning taxation rates in Polish system.

The burden of proof lies with the taxpayer. He must present reliable documentsThat will confirm the legality of the cash.

How to paper the origin of the cash?

To defend yourself from possible problems, keep all documentation concerning the origin of the resources. These may be:

• bank statements confirming the payment of savings,
• inheritances or wills,
• Sales contracts real estate, cars or another valuables,
• donation documents (including applications to the taxation office),
• confirmation of winnings in games of chance or betting.

It is worth remembering that e.g. donations from the closest household are exempt from tax, but also should be reported and decently documented.

Fiskus has access to your account

Increasing the control capacity of the state makes the strategy increasingly closely monitor the financial flows of citizens. Key developments in this respect are:

• Reporting work of banks to the General Financial Information Inspector (GIIF) of each transaction exceeding EUR 15 000,
• from July 2022 the taxation office may get full view of the account history banking without informing the taxpayer,
• large cash withdrawals are recorded and may be examined by the National taxation Administration.

Although we inactive have the right to have our own money, any different or disproportionate action can be interpreted as suspicious.

Cash at home = risk

Keeping cash at home is not only a taxation issue, but besides physical and financial security.

• Money in the safe are not covered by the Bank warrant Fund warrant guarantee (with banks up to EUR 100 000).
• In case of theft, fire or flooding, Retrieving money may not be possibleIf we don't have papers confirming their existence.
• Insurance of property often reduce responsibility for cash – for example, only a fewer 1000 zlotys, if cash was kept in a certified safe.

Therefore, experts recommend:

• Application certified safes mounted on a wall or floor,
• alarm strategy and monitoring,
• the acquisition of an appropriate insurance with cash extension.

Domestic cash? Yes, but with the head

Keeping money at home is not a crime.. In an age of advanced analytical tools, the fiscal strategy is increasingly effective in uncovering differences between income and expenditure. Therefore, even if we have nothing to hide, it is worth acting with caution.

Not only the appropriate documentation, but besides risk awareness cash-related outside the banking strategy can prevent unpleasant consequences. Cash may give you a sense of control, but it does not relieve you of the work to keep transparency before the law.