Bought Something Big? The 75% Tax Trap Explained

21 March 2026 Poland Radar 0 Comments

Poland’s 75% tax penalty can hit unexplained purchases. Understand the rule, DAC7 reporting, and how to avoid a bill. 75% tax penalty.

The tax office in Poland can demand a huge levy when you cannot explain a major purchase. Moreover, the controversial 75% tax penalty targets unexplained excesses over your declared income.

Table of Contents

How the 75% tax penalty works

The rule compares your documented income to your spending and asset growth. Consequently, tax officials check whether your expenses match your taxed earnings. If the numbers do not add up, the institution opens a proceeding. In addition, the burden of proof shifts to you. Therefore, you must prove that funds came from legal, taxed sources.

The rate is blunt. If you cannot explain the unexplained excess, the office applies a 75 percent levy on that excess. However, the charge applies only to the unexplained surplus. For example, you buy an apartment for 400,000 PLN. If you can document 300,000 PLN, the unexplained 100,000 PLN faces the 75 percent charge. Still, that tax can wreck a household budget.

KAS activity, DAC7 and what that means for expats

The National Tax Administration (Krajowa Administracja Skarbowa, KAS) intensified checks recently. In 2025, KAS reported 2.64 million control actions. Moreover, findings grew from 14.76 billion PLN to 19.05 billion PLN. Consequently, the authority shifted to faster, mass “checking activities” instead of only dramatic audits. In addition, Poland implemented DAC7 on July 1, 2024. As a result, platforms must report users who earned over 2,000 euros or did more than 30 transactions a year. Airbnb, Allegro, OLX, Vinted and Booking now share user data with the tax office. Therefore, small sales or short-term rentals can trigger questions.

Practical legal context and risks

Polish courts treat this levy as a special tax, not a criminal sentence. However, the procedural outcome feels severe. The Constitutional Tribunal and administrative courts affirmed that the taxpayer must document lawful sources. Thus, saying “I kept cash at home” no longer suffices. In addition, the Supreme Administrative Court clarified that bank use reduces the plausibility of keeping large cash sums at home.

Remember that loans from family must be written down and notified since 2016. Otherwise, the office may treat the funds as undeclared income. Also, the statute of limitations usually covers five years. Therefore, transactions from years past can still trigger action.

💡 GOOD TO KNOW: If you live in Poland as an expat, keep receipts and bank statements for five years. ZUS refers to social security, NFZ to the national health fund, PESEL is your national ID number, and a mandat is a fine. In addition, always document big gifts or loans in writing and report them if required. Finally, note that casual online sales can look like undeclared business under DAC7, so keep records showing you sold personal used items.

How to avoid trouble is simple. First, document large cash flows when they occur. Secondly, keep bank statements, contracts and receipts for at least five years. Third, register small business activity if you buy to resell. Finally, seek professional advice for complex cases.

In short, the system demands that what you spend matches what you officially earned. Consequently, keep paperwork. Otherwise, the institution can and will act.

Source: Read original article