Returning a Gift to Avoid Tax

Consensus, Convalidation, and the Limits of Retroactive Unwinding Under Polish Gift Tax Law

Monetary gifts between family members — from a parent to a child, between siblings, or from grandparents — are commonplace in Poland. Difficulties arise, however, when the cumulative value of such transfers inadvertently exceeds the gift tax free threshold and the donee has failed to satisfy the formal requirements for the Polish gift tax exemption for family members. Can you reverse a gift in Poland and thereby extinguish the tax obligation? And what if no gift agreement was ever concluded — because the transferee never manifested the requisite intent to accept?

The answer is less straightforward than it might appear. A proper analysis demands that one distinguish among several factual scenarios — from absence of consensus, through gift revocation, to a reciprocal gift — each of which gives rise to materially different gift return tax consequences under the 2026 Polish gift tax regime. A landmark judgment of the Supreme Administrative Court (Naczelny Sąd Administracyjny, hereinafter “SAC”) of August 7, 2024 (case no. III FSK 1148/23) has, moreover, disrupted the hitherto prevailing orthodoxy regarding the irrevocability of tax consequences once a gift has been revoked.

Monetary Gifts and the Gift Tax Free Threshold in Poland

Pursuant to Article 1(1)(2) of the Act on Inheritance and Gift Tax (ustawa o podatku od spadków i darowizn, hereinafter “the Act”), the acquisition by natural persons of ownership of property or proprietary rights by way of gift is subject to Polish gift tax. Article 6(1)(4) provides that the tax obligation arises at the moment the donor executes a declaration in notarial form or — where the agreement is concluded without observing the prescribed form — at the moment of performance of the promised obligation. In practice, the mere crediting of funds to the donee’s account may constitute the moment at which the gift tax liability crystallizes.

A structural observation warrants attention in this context. Civil law scholarship emphasizes that the requirement of notarial form for the donor’s declaration serves not merely a protective and evidentiary function, but also a public-law purpose: it facilitates the registration of gifts for fiscal purposes, with the notary acting as the tax collector (płatnik) for inheritance and gift tax. Informal gifts — convalidated by performance alone — escape this registration mechanism entirely. It is precisely for this reason that the legislature imposed a separate SD-Z2 reporting obligation on donees who receive gifts without notarial involvement.

The Act establishes gift tax free thresholds under Article 9(1), the quantum of which depends on the tax group to which the donee belongs. Provided that the aggregate value of gifts from a single donor — calculated over the year in which the most recent acquisition occurred and the five preceding years — does not exceed the applicable threshold, the donee bears no reporting or payment obligation:

• PLN 36,120 for Tax Group I (spouse, descendants, ascendants, stepchildren, siblings, stepparents, parents-in-law, sons-in-law, daughters-in-law);
• PLN 27,090 for Tax Group II (descendants of siblings, siblings of parents, descendants and spouses of stepchildren, spouses of siblings, siblings of spouses, spouses of siblings of spouses, spouses of other descendants);
• PLN 5,733 for Tax Group III (all other persons).

These amounts are subject to adjustment by ministerial regulation in accordance with the indexation mechanism prescribed by Article 17(1)–(4) of the Act.

The Polish Gift Tax Exemption for Family Members — The Zero Tax Group

Exceeding the gift tax free threshold does not automatically trigger a tax liability for the closest family members. Article 4a of the Act provides a separate exemption — unlimited in amount — for acquisitions by a spouse, descendants, ascendants, stepchildren, siblings, a stepfather, or a stepmother. This narrower circle of beneficiaries — the zero tax group in Poland (zerowa grupa podatkowa) — constitutes a subset of Tax Group I as defined in Article 14(3)(1). The distinction carries practical significance: parents-in-law, sons-in-law, and daughters-in-law belong to Tax Group I and thus benefit from the higher gift tax free threshold of PLN 36,120, but upon exceeding that threshold they cannot avail themselves of the Article 4a Polish gift tax exemption for family members and will be liable for tax on the surplus.

A gift from a parent to a child may therefore be of any amount and remain entirely untaxed, provided that the donee satisfies two formal requirements:

1. SD-Z2 reporting obligation and deadline — the acquisition must be reported to the competent head of the tax office within six months of the date on which the tax obligation arose.
2. Documentation of monetary gifts — where the gift consists of monetary funds exceeding the tax-free threshold, receipt must be documented by proof of transfer to the donee’s payment account, to another account held at a bank or cooperative savings and credit union, or by postal order.

Failure to comply with these conditions results in forfeiture of the exemption and taxation of the surplus above the gift tax free threshold under the rules applicable to Tax Group I (Article 4a(3) of the Act).

When Threshold Exceedance Takes the Donee by Surprise

It bears noting that Article 9(2) of the Act defines the aggregation period as “the year in which the most recent acquisition occurred and the five years preceding that year” — meaning that the effective reference period may extend to nearly six years. Precision in computing this interval is of practical consequence in borderline cases under the Polish gift tax regime.

The risk of inadvertent exceedance of the gift tax free threshold is far from hypothetical. Consider the following scenario: a close relative transfers PLN 1,000 per month to the donee over a period of three years (PLN 36,000 in aggregate), then — after a hiatus of nearly two years, just before the expiry of the reference period measured from the first gift — transfers an additional PLN 40,000 toward the purchase of a motor vehicle. In such circumstances, a Polish gift tax obligation would arise on PLN 39,880.

Where the donee belongs to the zero tax group in Poland, the surplus need not result in taxation — provided that the SD-Z2 reporting obligation is discharged in time and the monetary gift is properly documented by bank transfer or postal order. The difficulty arises when the donee becomes aware of the threshold exceedance only after the six-month deadline has elapsed, thereby forfeiting the Article 4a exemption.

In this connection, it is worth noting that Article 4c of the Act — introduced by the amendment of November 21, 2025, and effective as of January 7, 2026 — now permits reinstatement of the SD-Z2 filing deadline where the taxpayer demonstrates that the default occurred without fault. This represents a significant procedural innovation in Polish gift tax law in 2026.

In each of these situations — and equally where the donee falls outside the zero tax group or has failed to satisfy the formal requirements — the question arises whether returning a gift to avoid tax is legally effective. The answer depends on the precise legal characterization of the transaction at issue.

Returning a Gift, Gift Revocation, Absence of Consensus — Four Scenarios and Four Distinct Tax Outcomes

Before turning to the specific ruling under analysis, it is useful to delineate the factual configurations that practitioners commonly treat as interchangeable. Each rests on a distinct legal construction and engenders materially different gift return tax consequences. Any taxpayer facing a dispute with the tax authority in this area must first identify which scenario applies.

Scenario 1: Absence of Consensus — No Gift Agreement Is Formed

Although gifts are colloquially perceived as unilateral acts of generosity, in legal terms a gift (darowizna) constitutes a bilateral agreement (Article 888(1) of the Civil Code). The gift agreement consensus requirement thus demands concordant declarations of intent by both parties — the donor must intend to confer a gratuitous benefit, and the donee must manifest the intent to accept it. Where the transferee never expressed such intent, no agreement comes into existence regardless of the narrative contained in the transfer description. The absence of an agreement entails the absence of an acquisition by way of gift and, consequently, the absence of any Polish gift tax obligation. Neither the SD-Z2 reporting obligation nor any tax payment arises.

One must acknowledge, however, that civil law does not require an express declaration of acceptance from the donee. As the literature confirms, such a declaration may be made in any form and may, in practice, be inferred per facta concludentia — that is, from conduct reasonably interpretable as assent to the gratuitous transfer. The doctrine of implied acceptance of a gift under civil law is particularly relevant here: the mere retention and use of funds received may suffice. If the transferee fails to return the funds promptly but instead retains them in his account for an extended period or makes any disposition thereof, his conduct may be classified as implied acceptance of the gift — even in the absence of any verbal affirmation. In such a case, convalidation of the informal gift agreement occurs and the tax obligation crystallizes. It is precisely at this boundary — between the absence of consensus and implied acceptance — that the classification of any given transaction is determined.

Scenario 2: Erroneous Transfer — No Donative Intent

This configuration partially overlaps with the first scenario but rests on a different legal basis. The sender effects the transfer by mistake — to the wrong account, in the wrong amount, or to the wrong recipient. Such a transfer does not manifest donative intent (animus donandi) and constitutes an undue payment (świadczenie nienależne) within the meaning of Article 410(2) of the Civil Code. Since the sender lacks the intent to make a gift and the recipient lacks the intent to accept one, no acquisition by way of gift occurs and no Polish gift tax obligation arises. The recipient is, however, obliged to return the undue payment under the general rules governing unjust enrichment.

Scenario 3: Gift Revocation — The Landmark 2024 SAC Judgment

The Civil Code permits gift revocation (odwołanie darowizny) of an executed gift on grounds of gross ingratitude on the part of the donee (Article 898(1)) or the donor’s subsequent impoverishment (Article 897). This situation is qualitatively different from the two preceding scenarios: the gift agreement was validly concluded, performance was rendered, and the tax obligation — pursuant to Article 6(1)(4) of the Act — arose at the moment of performance.

Until recently, the prevailing view in the literature and in tax proceedings held that gift revocation operates ex nunc — prospectively only — and that a tax obligation which had already arisen was not extinguished by the subsequent revocation and return of the gift. Under this orthodox position, returning a gift following revocation did not eliminate the Polish gift tax liability.

That orthodoxy was, however, called into serious question by the Supreme Administrative Court in its judgment of August 7, 2024 (case no. III FSK 1148/23, published in ONSAiWSA 2025/2/25). The facts were as follows: the donee (classified under Tax Group III) received a monetary gift of PLN 1,200,000 by bank transfer. Several months later, the donor revoked the gift on grounds of subsequent impoverishment — she was required to return expropriation compensation — and the donee returned the funds. The tax authorities of both instances nonetheless assessed a tax liability of PLN 237,786, maintaining that gift revocation had no bearing on a tax obligation that had already crystallized.

The SAC dismissed the tax authority’s cassation appeal, articulating two propositions of fundamental importance:

First, the essence of inheritance and gift tax is the taxation of actual and definitive enrichment. The tax base under Article 7(1) of the Act is the value of acquired property and rights after deduction of debts and encumbrances — that is, the net value of the accretion. Where, as a consequence of gift revocation, the basis for enrichment is annulled and the funds are returned, there is no accretion of wealth capable of constituting the tax base.

Second, an interpretation of Article 6(1)(4) read in conjunction with Article 7(1) of the Act that permits the imposition of tax calculated on the value of non-existent enrichment is irreconcilable with the constitutional principles of a democratic state governed by the rule of law (Article 2 of the Constitution) and of proportionality (Article 31(3) of the Constitution). The SAC emphasized that levying tax in the absence of definitive enrichment would produce an outcome tantamount to partial confiscation of the taxpayer’s assets. In resolving the interpretive doubts, the court invoked the principle of in dubio pro tributario — resolving ambiguities in favor of the taxpayer.

This judgment represents a significant departure from the prior jurisprudential consensus. It must, however, be noted that the ruling was rendered in a specific factual context: the revocation was prompted by an objective cause (the donor’s impoverishment resulting from compulsory return of expropriation compensation), the tax authorities did not challenge the effectiveness of the revocation, and the totality of the circumstances negated any suggestion of abuse or circumvention of tax law. Whether the administrative courts will extend this reasoning to all instances of gift revocation — particularly those motivated solely by a desire to avoid tax consequences — remains to be seen.

For taxpayers facing an analogous tax dispute, the SAC judgment provides a powerful argument, but its reach should not be overstated. The critical distinction between gift revocation and gift return must be borne in mind: only a legally effective revocation — meeting the requirements of the Civil Code and untainted by tax avoidance motives — can engage the reasoning of this ruling.

Scenario 4: Reciprocal Gift — A Separate Juridical Act

In this variant, the donee — having validly accepted the original gift — makes a separate gift to the original donor. Although the economic result is a return of the funds, in legal terms the transaction comprises two independent juridical acts, each subject to independent tax assessment. The first gift generates a tax obligation on the part of the donee; the second generates a tax obligation on the part of the original donor, who now becomes a donee in his own right. Neither transaction extinguishes the gift return tax consequences of the other. A reciprocal gift is therefore not a reversal of the original gift in any legal sense, but rather a new, autonomous gratuitous transfer.

The correct classification of a given transaction under one of the foregoing scenarios is dispositive of whether a Polish gift tax obligation arises at all and, if so, whether and by what means it may be discharged.

The 2026 KIS Ruling: No Consensus, No Gift, No Tax Obligation

Against this doctrinal backdrop, the Director of the National Tax Information Service (Dyrektor Krajowej Informacji Skarbowej, hereinafter “KIS”) issued an individual tax ruling on January 26, 2026, in a matter falling squarely within Scenario 1. The applicant (a father) had received from his son a bank transfer of funds bearing the description “gift” (darowizna). He did not, however, intend to accept the gift and promptly effected a return transfer of the identical amount, annotated “return of erroneously effected transfer.” The son accepted the return, and the parties confirmed orally that no gift agreement had been concluded. The applicant posed two questions to the tax authority:

• Whether, in light of the return, no gift in fact occurred, and consequently whether there was no need to satisfy the conditions of the Polish gift tax exemption for family members under Article 4a of the Act; and
• Whether neither party bore an SD-Z2 reporting obligation.

The Director of KIS confirmed the applicant’s position: since the father’s intention was not to accept a gift from his son, he did not conclude a gift agreement with him, and he unequivocally declares that the transfer was made in error. Accordingly, there is no basis for deriving any Polish gift tax consequences. “There is therefore no obligation to file form SD-Z2, since you did not receive any gift — as you state, the transfer was made in error” (individual tax ruling of January 26, 2026, ref. no. 0111-KDIB2-3.4015.446.2025.2.JKU).

Does Returning a Gift Protect Against Tax? — The Limits of the Ruling’s Protective Scope

The authority’s reasoning is internally coherent: since a gift agreement requires consensus, and the transferee never manifested the intent to accept, no agreement was concluded and no taxable event exists. The authority did not examine the gift return tax consequences in the abstract — in the facts as presented, there was simply no gift to return.

Several important limitations of this ruling must, however, be noted.

First, the authority relied exclusively on the factual account furnished by the applicant. An individual tax ruling — by the very nature of this legal instrument — accepts the description of events as presented by the taxpayer and protects only that specific taxpayer in the circumstances so described (Articles 14k–14n of the Tax Ordinance). It does not constitute a general norm capable of automatic application to different factual configurations.

Second — and this is the critical point — the boundary between “absence of intent to accept” and “implied acceptance of a gift” is, in practice, exceedingly thin. As noted above, the donee’s declaration may be made per facta concludentia, and the mere use of the received funds may be construed as implied acceptance under civil law. In such circumstances, convalidation of the informal gift agreement occurs with retroactive effect (ex tunc), and the Polish gift tax obligation arises from the moment of performance — irrespective of any subsequent return of the funds. In the ruling under discussion, the applicant expressly stated that he did not accept the funds and returned them without delay, which permitted the authority to conclude that no gift agreement had been formed at all. The analysis would differ materially, however, where the recipient retains the funds for an extended period, makes any disposition thereof, or otherwise manifests acceptance — only to effect a return at a later stage, for instance upon realizing that the gift tax free threshold has been exceeded.

The tax authorities retain the power to make an independent assessment of the facts in the course of any subsequent tax proceedings. Determinative weight will attach to the objective circumstances of the case: the interval between receipt of the funds and returning the gift, any interim disposition of the funds, the content of correspondence between the parties, and — above all — the credibility of the assertion that the recipient never intended to accept, assessed in light of the totality of the circumstances. The mere fact of a return transfer bearing the annotation “made in error” does not conclusively determine the legal characterization of the event if the remaining circumstances indicate that the parties originally intended to effect a gift.

The 2026 KIS ruling under analysis should not, therefore, be read as establishing a general principle that returning a gift to avoid tax is legally effective. It is a determination confined to a specific set of facts in which — on the applicant’s account — no gift agreement was ever concluded.

Conclusion: Gift Return Tax Consequences — Key Takeaways

In effecting gifts, rigorous attention to the gift tax free thresholds and the reference periods within which they operate is of paramount importance. Donees within the zero tax group in Poland who receive monetary gifts exceeding the threshold should bear in mind the six-month deadline for discharging the SD-Z2 reporting obligation — a condition precedent to the Polish gift tax exemption for family members that requires, in the case of monetary gifts, proper documentation of receipt by bank transfer or postal order. Where the deadline is missed without fault, reinstatement may now be sought under Article 4c of the Act, effective since January 7, 2026.

The practical significance of the documentation requirement is illustrated by the ruling of May 9, 2025 (ref. no. 0111-KDIB2-3.4015.61.2025.2.ASZ): a mother converted EUR 10,000 at a bank, withdrew the cash, and handed it to her daughter — a cash gift from parent to child — who on the same day and at the same branch deposited the funds into her own account. The Director of KIS nonetheless held that the requirement of Article 4a(1)(2) of the Act had not been met — the monetary gift was not documented by proof of transfer to the donee’s payment account, to another account held at a bank or cooperative savings and credit union, or by postal order — and could not, therefore, qualify for the Polish gift tax exemption for family members.

Where a gift has been effectively revoked under the Civil Code and the funds returned, the SAC judgment of August 7, 2024 (III FSK 1148/23) opens a new line of defense: taxation of non-existent enrichment is constitutionally impermissible. The practical reach of this proposition remains to be tested in further case law, particularly as regards revocations untethered from objective necessity. For taxpayers navigating these complexities, obtaining professional tax opinions and analyses before acting is advisable, as the boundary between permissible tax planning and impermissible tax avoidance remains narrow.

Conversely, where the transferee never intended to accept the transfer as a gift and effected a return without delay, the authority confirmed that no gift agreement was concluded at all. The legal characterization of the transaction turns, however, not on the mere fact of returning a gift or the content of the transfer description, but on the actual intent of the parties — which, in case of doubt, remains subject to verification by the tax authorities. It bears emphasis that under civil law, the implied acceptance of a gift need not be expressed explicitly — it may be inferred from the recipient’s conduct alone. The longer the funds remain in the recipient’s account, and the greater the degree to which the recipient exercises dominion over them, the more difficult it becomes to sustain the proposition that no gift was ever made.

Author: Robert Nogacki, legal counsel (radca prawny) at Kancelaria Prawna Skarbiec, providing tax advisory and legal advisory services

Robert Nogacki

Founder and Managing Partner of Skarbiec Law Firm, recognized by Dziennik Gazeta Prawna as one of the best tax advisory firms in Poland (2023, 2024). Legal advisor with 19 years of experience, serving Forbes-listed entrepreneurs and innovative start-ups. One of the most frequently quoted experts on commercial and tax law in the Polish media, regularly publishing in Rzeczpospolita, Gazeta Wyborcza, and Dziennik Gazeta Prawna. Author of the publication “AI Decoding Satoshi Nakamoto. Artificial Intelligence on the Trail of Bitcoin’s Creator” and co-author of the award-winning book “Bezpieczeństwo współczesnej firmy” (Security of a Modern Company). LinkedIn profile: 18 500 followers, 4 million views per year. Awards: 4-time winner of the European Medal, Golden Statuette of the Polish Business Leader, title of “International Tax Planning Law Firm of the Year in Poland.” He specializes in strategic legal consulting, tax planning, and crisis management for business.