Dual Individual Retirement Accounts Under Polish Law:
The Punitive Seventy-Five Percent Tax Rate
Among the most severe provisions in the Polish tax code, one stands apart – not for its targeting of tax havens, aggressive optimization schemes, or carousel fraud, but for penalizing what may amount to nothing more than administrative oversight: the simultaneous maintenance of two individual retirement accounts.
The Mechanics of an Inadvertent Violation
The factual pattern that gives rise to liability under this provision is deceptively mundane. An individual opens an Individual Retirement Account (Indywidualne Konto Emerytalne, hereinafter “IKE”) at a commercial bank, makes a single lump-sum contribution toward government bonds, and – as is common with dormant accounts – gradually loses track of its existence. Several years later, attracted by favorable equity market conditions, the same individual opens a second IKE at an online brokerage. Over the ensuing years, active trading generates substantial capital gains. It is only upon attempting to consolidate accounts – or, more commonly, upon initiating a transfer – that the individual discovers the concurrent existence of two IKEs, in direct contravention of the governing statute.
This scenario admits of numerous variations. The duplication may arise from confusion between the IKE and the superficially similar IKZE (Indywidualne Konto Zabezpieczenia Emerytalnego – Individual Retirement Security Account), from failure to recognize that a unit-linked life insurance policy contains an embedded IKE component, or simply from the passage of time obscuring the memory of accounts opened years earlier.
The Statutory Prohibition: Articles 4 and 5 of the IKE Act
The Act of 20 April 2004 on Individual Retirement Accounts and Individual Retirement Security Accounts (hereinafter the “IKE Act”) establishes an unequivocal rule: each natural person may maintain only one IKE at any given time. Article 5 provides that savings on an IKE may be accumulated by a single saver exclusively, while Article 4 conditions the tax exemption upon the saver’s maintaining – pursuant to a written agreement – savings on one IKE only.
The sole statutory exception pertains to the contemplated transformation of Open Pension Fund (OFE) assets into IKE accounts, wherein the legislature permitted concurrent maintenance of an existing IKE alongside one arising from the OFE conversion, subject to the aggregate annual contribution limit.
Beyond this narrow exception, the simultaneous maintenance of two IKEs constitutes a statutory violation carrying what is, in effect, a confiscatory tax consequence.
The Punitive Tax Rate: Article 30(1)(7a) of the Personal Income Tax Act
The fiscal consequence of maintaining concurrent IKEs is prescribed by Article 30(1)(7a) of the Act of 26 July 1991 on Personal Income Tax (the “PIT Act”), which imposes a flat-rate income tax of seventy-five percent on the income derived from each IKE.
Three features of this provision warrant particular emphasis.
First, the seventy-five percent rate represents the highest flat-rate tax in the entire Polish fiscal system. For comparative reference, the standard capital gains tax (colloquially known as the podatek Belki, or “Belka tax”) stands at nineteen percent, while even the punitive rate applicable to undisclosed income is – at the same seventy-five percent – no more severe. The legislature has thus treated a breach of the single-account rule with the same gravity it reserves for the concealment of taxable income.
Second, the tax applies to income on every IKE held concurrently, not merely the account opened in violation of the statute. Where, for instance, an individual maintains two IKEs generating income of PLN 3,000 and PLN 40,000 respectively, the seventy-five percent levy attaches to both – producing a combined tax liability of PLN 32,250, as against zero had the individual maintained a single qualifying account.
Third, pursuant to Article 30(3a) of the PIT Act, income subject to this punitive rate may not be offset by capital losses. Even where one account has generated a net loss, no set-off against gains on the other is permissible.
The Absence of Withholding: Self-Assessment Obligations Under PIT-38
A widespread misconception holds that the financial institution maintaining the IKE bears responsibility for calculating and remitting the seventy-five percent tax – as it would, for example, when withholding the standard capital gains tax on an ordinary brokerage account. This assumption is incorrect.
In its individual tax ruling of 7 May 2024 (ref. 0114-KDIP3-2.4011.166.2024.2.JK2), the Director of the National Tax Information Service (Dyrektor Krajowej Informacji Skarbowej) unambiguously confirmed that the financial institution maintaining an IKE does not serve as the tax remitter (płatnik) with respect to the levy under Article 30(1)(7a). Article 41(4) of the PIT Act – which enumerates the categories of flat-rate tax subject to institutional withholding – does not include the provision in question.
The practical consequence is that the taxpayer must independently determine the income accrued on each IKE during the period of concurrent maintenance, calculate the seventy-five percent tax, report it on the annual PIT-38 return (Section G, line 44), and remit the amount to the competent tax office by 30 April of the year following the tax year in which the violation occurred. Where the violation spans multiple tax years, separate assessments are required for each.
The Saver’s Declaration: Article 7 of the IKE Act and the Question of Criminal Fiscal Liability
Upon concluding an IKE agreement, the financial institution is statutorily required to obtain from the prospective saver a declaration that he or she does not maintain an IKE with any other financial institution (Article 7(1) of the IKE Act). Prior to the submission of this declaration, the institution must advise the saver of the consequences of providing false or misleading information: liability under Article 56 of the Fiscal Penal Code (Kodeks karny skarbowy) and the punitive taxation of income on all concurrently held IKEs (Article 7(3) of the IKE Act).
In practice, most individuals execute this declaration by ticking a checkbox on a digital application form, without devoting meaningful attention to its content. Where the declaration proves inaccurate – even through inadvertent error – additional questions of criminal fiscal liability arise.
It is at this juncture that a further layer of doctrinal complexity emerges. As the leading commentary observes (A. Kopeć, K. Niziołek, P. Paczkowski, Indywidualne konta emerytalne: Komentarz (C.H. Beck 2004), art. 7, point 7), the applicability of Article 56 of the Fiscal Penal Code to declarations made to a financial institution is subject to serious doubt. The institution, at the time of receiving the declaration, constitutes neither a tax authority, nor another “authorized body” (inny uprawniony organ), nor a tax remitter – the latter status attaching only upon effecting a withdrawal of accumulated funds. Moreover, liability under Article 56 requires a subjective element: the saver must be conscious that the declaration is inconsistent with the true state of affairs. Absence of such awareness – even where attributable to a failure of due diligence – precludes criminal fiscal liability.
Compounding the confusion, financial institutions themselves frequently conflate the criminal provisions applicable to IKE and IKZE accounts respectively. Whereas the IKE statutory framework references Article 56 of the Fiscal Penal Code, the IKZE provisions invoke Article 233 of the Criminal Code (Kodeks karny). Instances have been documented in which an institution, deploying a form designed for IKZE agreements, erroneously advises the IKE applicant of liability under Article 233 of the Criminal Code – a provision that, by its terms, is inapplicable. A defective admonition of this nature, as the doctrine indicates, negates criminal fiscal liability but does not shield the saver from the tax consequences of the seventy-five percent rate – though it may furnish grounds for a civil damages claim against the institution that failed to discharge its statutory duty of proper advisement.
The Validity of the Second IKE Agreement: Nullity Under Article 58 of the Civil Code
A prevalent assumption holds that an individual maintaining two IKEs may simply close one – typically the smaller – and thereby resolve the matter. The statutory framework, however, does not afford the saver such discretion.
The first IKE was established in conformity with the law. The second was opened in contravention of Article 5 of the IKE Act and on the basis of an objectively inaccurate declaration under Article 7(1) – however unintentional. This raises the question whether the second agreement is vitiated by absolute nullity under Article 58(1) of the Civil Code (Kodeks cywilny), which renders void any juridical act contrary to a statutory provision.
Were the tax authorities to accept that the second IKE never constituted a valid retirement account within the meaning of the IKE Act – but rather an ordinary brokerage account maintained under the formal designation of an IKE – the tax consequences would differ from the seventy-five percent sanction, though not necessarily to the taxpayer’s advantage. Income from the “void” IKE would be subject to the standard nineteen percent capital gains tax, without access to any retirement-related exemption.
It bears noting, however, that the earliest commentators on the IKE Act acknowledged the possibility of so-called “dormant IKEs” (martwe IKE) – valid agreements for the maintenance of an IKE to which no transfer payment has been made and to which no further contributions may be directed (A. Kopeć, K. Niziołek, P. Paczkowski, art. 7, point 2). This suggests that a defective second IKE may not be automatically void ab initio, but merely non-functional – thereby preserving the application of the punitive seventy-five percent rate.
A further argument against automatic nullity lies in the structure of Article 58(1) in fine of the Civil Code itself: given that the legislature, in Article 30(1)(7a) of the PIT Act, prescribed an autonomous tax sanction for the concurrent maintenance of savings in more than one IKE – a sanction that by its very nature presupposes the existence of valid legal relationships on both accounts – it is precisely this sanction that may constitute the “other consequence” within the meaning of Article 58(1) in fine, thereby precluding absolute nullity of the second IKE agreement.
The question has not been authoritatively resolved in the case law of the administrative courts, leaving considerable legal uncertainty for savers who find themselves in this predicament.
Remedial Strategies: Liquidation, Transfer Payment, and Withdrawal
The paramount imperative is promptness. Each day during which two IKEs are concurrently maintained enlarges the potential tax base subject to the seventy-five percent rate. Income accruing during the period of violation constitutes income from which the saver will ultimately surrender three-quarters to the treasury.
The available remedial pathways depend upon the specific circumstances – the value of assets in each account, the contribution history, whether a transfer payment has already been initiated, and the posture of the relevant financial institutions. The principal options include: effecting a withdrawal (zwrot) from the lower-value account (entailing standard nineteen percent taxation on the income of the closed account – a cost, but one materially lower than seventy-five percent); executing a transfer payment (wypłata transferowa) from one IKE to the other (tax-neutral, but requiring the cooperation of both institutions and compliance with the documentation requirements of Article 35 of the IKE Act); and, where a transfer has been initiated but blocked, pursuing legal recourse against the institution withholding the funds, invoking the statutory fourteen-day deadline for completion of a transfer payment.
In each of these scenarios, correct legal characterization of the situation, coordinated engagement with both financial institutions, and proper tax compliance – including determination of the relevant periods and accounts to which the seventy-five percent rate applies – are essential.
Conclusion
The seventy-five percent tax penalty for the concurrent maintenance of two IKEs is a provision whose existence typically comes to the attention of the taxpayer only upon personal encounter with its consequences. It receives no prominence in the marketing materials of brokerages or banks offering individual retirement accounts. The verification mechanism – a declaratory statement by the saver under Article 7 of the IKE Act – is formal and readily circumvented (even unintentionally), and its efficacy as a safeguard has been questioned in the scholarly literature.
The resulting consequences are, nevertheless, severe and difficult to remedy without professional assistance. The seventy-five percent rate on income from every concurrently held IKE, the obligation of self-assessment (the financial institution bearing no withholding duty), the unresolved question of the second agreement’s validity, and the potential for blocked inter-institutional transfers together create a legal and fiscal predicament whose resolution demands both specialized knowledge of retirement account legislation and practical experience in engaging with financial institutions and tax authorities.
Statutory references: Articles 30(1)(7a), 30(3a), 21(1)(58a), 30a(1)(10), and 41(4) of the Act of 26 July 1991 on Personal Income Tax; Articles 4, 5, 7(1)–(4), and 35(4) of the Act of 20 April 2004 on Individual Retirement Accounts and Individual Retirement Security Accounts; Article 56 of the Act of 10 September 1999 – Fiscal Penal Code; Article 58(1) of the Act of 23 April 1964 – Civil Code; Individual Tax Ruling of the Director of the National Tax Information Service of 7 May 2024, ref. 0114-KDIP3-2.4011.166.2024.2.JK2.
Author: Robert Nogacki – Attorney at Law (*radca prawny*), Kancelaria Prawna Skarbiec
Robert Nogacki – licensed legal counsel (radca prawny, WA-9026), Founder of Kancelaria Prawna Skarbiec.
There are lawyers who practice law. And there are those who deal with problems for which the law has no ready answer. For over twenty years, Kancelaria Skarbiec has worked at the intersection of tax law, corporate structures, and the deeply human reluctance to give the state more than the state is owed. We advise entrepreneurs from over a dozen countries – from those on the Forbes list to those whose bank account was just seized by the tax authority and who do not know what to do tomorrow morning.
One of the most frequently cited experts on tax law in Polish media – he writes for Rzeczpospolita, Dziennik Gazeta Prawna, and Parkiet not because it looks good on a résumé, but because certain things cannot be explained in a court filing and someone needs to say them out loud. Author of AI Decoding Satoshi Nakamoto: Artificial Intelligence on the Trail of Bitcoin’s Creator. Co-author of the award-winning book Bezpieczeństwo współczesnej firmy (Security of a Modern Company).
Kancelaria Skarbiec holds top positions in the tax law firm rankings of Dziennik Gazeta Prawna. Four-time winner of the European Medal, recipient of the title International Tax Planning Law Firm of the Year in Poland.
He specializes in tax disputes with fiscal authorities, international tax planning, crypto-asset regulation, and asset protection. Since 2006, he has led the WGI case – one of the longest-running criminal proceedings in the history of the Polish financial market – because there are things you do not leave half-done, even if they take two decades. He believes the law is too serious to be treated only seriously – and that the best legal advice is the kind that ensures the client never has to stand before a court.
