Whether a donation from Ukraine made to a Ukrainian residing in Poland due to the war should be reported to the Polish Tax Office depends on several factors. An important tax interpretation has recently appeared on this issue: Individual Interpretation by the Director of the KIS of 20 October 2022, sygn. 0115-KDIT1.4011.330.2022.2.MST.
According to the above tax interpretation, in order to determine whether such a donation will be reportable to the Polish Tax Office, it will depend on whether this person from Ukraine has tax residency in Poland. The determination of tax residence is made in accordance with the Polish-Ukrainian Double Taxation Convention. According to this convention, in order to determine tax residence, the conflict rules (Article 4 of the aforementioned convention) should be applied: if a person has a permanent residence in both countries, he/she is deemed to be resident in the country with which he/she has closer ties (centre of his/her life interests). If this cannot be established, he/she shall be deemed to be domiciled in the State in which he/she habitually resides. If she habitually resides in both countries or does not habitually reside in either country, she will be considered domiciled in the country of which she is a national.
In the aforementioned tax interpretation, it was argued that the person who requested the interpretation is only temporarily residing in Poland due to the hostilities – these circumstances determine that the taxpayer is not resident for tax purposes in Poland, but in Ukraine, thus the person will still be a Ukrainian tax resident.
Also, another tax interpretation dated 3 January 2023, Director of the National Fiscal Information 0111-KDIB2-2.4015.141.2022.1.PB, indicates that:
– the acquisition of the ownership of things located abroad (in this case cash) is subject to tax if, at the time of the conclusion of the donation agreement, the acquirer was a Polish citizen or had a permanent residence in the territory of Poland,
– the acquisition of ownership of movables located within the territory of Poland is not subject to tax, if at the date of the acquisition neither the acquirer nor the donor was a Polish citizen and did not have a permanent residence
on the territory of the Republic of Poland – it is necessary that the funds were transferred from a Ukrainian bank account to the bank account of a Ukrainian residing in Poland,
– according to the issued interpretation, staying on the territory of the Republic of Poland on the basis of a temporary residence permit cannot be equated with permanent residence.
Therefore, in the event that a donation in the form of cash (from a Ukrainian bank account) is made to a Ukrainian residing in Poland in connection with the war (and this person continues to be a Ukrainian tax resident), such a donation will not be taxable according to the above tax interpretations.