Fiscus is going on large checks. You can pay 75% taxation even for a bike!

The taxation office starts mass checks on Polish spending, and the consequences can be devastating. Anyone who can't prove the legal origin of their purchases risks imposing a 75% punishment tax. Importantly, the taxation strategy does not only mark transactions of hundreds of thousands of zlotys, specified as buying a home or a luxury car. There may besides be much little spending under the reviewer’s eye, specified as a fresh tv and even a utilized bike. This is simply a real threat, which confirms the fresh ultimate Administrative Court ruling on matrimony from Warsaw. The couple bought the property for over PLN 320 thousand, but was incapable to paper the origin for the amount of only PLN 27 thousand. Effect? They had to pay over PLN 20,000 in criminal tax. This case is simply a red flag for millions of Poles who do not collect documentation of their finances. taxation officials throughout Poland are already analyzing data and starting the first proceedings.

Who's targeting the tax? These situations rise suspicion

Tax offices have increasingly effective tools to analyse citizens' finances. Controls are no longer just a coincidence. According to Money.pl portal, the fiscal body systematically compares the amount of expenditure incurred by the payer with the value of its officially collected assets and declared revenue. Any discrepancy may be an excuse to initiate a detailed procedure. There are respective high-risk groups that should be peculiarly vigilant.

The mark is primarily those who make large purchases for cash, especially erstwhile the value of the transaction exceeds their authoritative yearly income. Suspects are besides raised by entrepreneurs who they officially show losses in declarations, and at the same time they have a lavish lifestyle, buying costly cars or real estate. The peculiar attention of officials is besides drawn to those who show no income, yet they bear crucial expenses. The alarm signal for the IRS is besides cash transactions exceeding the equivalent of EUR 15 000. Under the Anti-money Laundering Act, specified operations are automatically reported to the General Inspector of Financial Information, which may be a direct impulse for taxation control.

75% taxation is not a myth. How does the taxation calculate the penalty?

75% sounds dangerous and many people mistakenly presume that it is charged from the full acquisition value. That's not true. The key is knowing the concept "surplus expenditure over documented revenue". The fiscal strategy imposes a punishment taxation only on the part of the amount we cannot prove to be originating. This is simply a fundamental principle, which is confirmed by the Accounting-Piseczno.pl portal, explaining that the amount of gross not found to cover is determined on the basis of expenses incurred and accumulated property.

Consider a applicable example: you buy an flat for PLN 500,000. You are able to paper that PLN 400,000 comes from your taxed earnings, savings in your bank account and a documented donation from your parents. However, there is 100 1000 zlotys that you cannot explain – that is the “surplus”. Tax of 75% will be charged only on this amount PLN 100 thousand, which means that you will have PLN 75 1000 to pay, not PLN 375 1000 from the full value of the property. It is worth noting that 75% is not a discretion. If the taxation authority finds that there are undisclosed sources, it must apply this rate. The Constitutional Court confirmed that this was not a punishment, but a "special kind of tax".

Cash at home is no longer an excuse. NSA has no mercy

One of the most common lines of defence of taxpayers is the translation that the acquisition money came from savings accumulated over the years in cash “under the pillow”. Even a fewer years ago, specified explanations may have been effective, but present officials and courts approach them with large reserve. In a series of judgments, the ultimate Administrative Court has made it clear that eloquent recourse to savings is not enough. According to 1 of the judgments cited by Law.pl: “It is the taxpayer’s work to show that his expenses are covered by taxed sources of income. It is not adequate to explain that for years it has accumulated savings in cash, despite having bank accounts."

The Court of First Instance pointed out that the condition of similarity to the origin of income ‘could not be achieved by a wordless, unsupported by any reasonable argument, indicating only certain possibilities’. This means that if you say you've been saving for 20 years, you gotta make it credible in any way – for example, by showing regular withdrawals from your account that were not spent on current expenses. The message itself, even supported by witness testimony, may be rejected as insufficient evidence. It is besides worth remembering that the form of payment does not matter. The problem concerns both cash transactions and transfersif there are funds of undocumented origin in the account.

What papers will defend you from punishment? Collect them now

The best defence against the allegations of the taxation is prevention and reliable documentation. Before you make any major purchase, make certain you have evidence of the legal origin of all penny. As indicated by the Investor's Guide.pl, the taxation office will recognise a number of papers that will confirm the legality of your resources. The basis is of course bank statements that show the past of your income and savings. This is the most crucial and reliable evidence.

What else is worth gathering? Here is simply a list of key documents:

• Bank credit agreements: If you're eating credit, the deal is essential proof.
• Family debt agreements: They must be written and, depending on the amount, reported to the taxation office on the PCC-3 form to benefit from the taxation exemption. As the Rzeczpospolita warns, the unnotified debt may be treated as an undisclosed origin of income.
• Certificates of succession: The rightful decision of the court to get the inheritance or to certify the succession.
• Confirmation of receipt of compensation: papers from insurance companies.
• Contracts for the sale of another assets: e.g. a contract to sale a car or earlier property.

Keep in head that the burden of proof lies with you in the proceedings concerning undisclosed income. The Office does not gotta prove you are guilty – you gotta prove your innocence and the legality of your resources.