The sale of movables (apart from business activity) is gaining more and more popularity. Such an operation is not always neutral for personal income tax purposes. The Personal Income Tax Act describes the circumstances in which the amounts obtained from such sales are taxable.
Special exemption for movables owned for at least six months
A natural person selling movables (e.g. works of art, vehicles) may avoid taxation if the sale took place after six months from the end of the month in which the person purchased the goods and it was not a sale made as part of business activity. It results from Article 10 par. 1 point 8 PIT act. It is therefore worth waiting an appropriate period from the acquisition of movables and only after the lapse of time to sell the previously purchased item. An earlier transaction may result in a tax liability to the tax office.
However, in this case, it is necessary to check whether there was an income determined in accordance with Art. 24 sec. 6 PIT act. It follows from this provision that the income is the difference between the income obtained from the sale of the thing and the cost of its purchase, reduced by the outlays made while owning the thing. If there is income as a result of the sale, it is subject to taxation according to general principles according to the tax scale. Such income is shown and settled in the annual tax declaration submitted by April 30 of the year following the year in which the item was sold.
Cars are one of the most sold moving goods
Laws on the sale of movables are particularly important for people who invest in the purchase of valuable movables such as cars. Thus, in order for the seller not to be obliged to pay the tax on the sale of the vehicle, it is sufficient that two conditions are met:
- The vehicle was sold outside of commercial business activity, and
- The sale for consideration took place after 6 months from the end of the month in which the vehicle was purchased.
It happens that the vehicle was won, for example, in a competition or lottery and the sale took place before 6 months. Then the basis for calculating the tax due on the sale of such a vehicle will be the difference between the revenue obtained from the sale (in accordance with sale contract), and its value being the basis for calculating the 10% flat-rate tax (in accordance with Article 22 (1d) of the PIT act).
Taxation of income from movable property invested abroad
The above rules will apply to movables sold abroad by Polish tax residents. As a rule, the agreements on avoidance of double taxation concluded by Poland show that revenues obtained from investments in movable property are subject to taxation in the country of residence of the taxpayer, i.e. in Poland, and then only national regulations apply to them.
PwC Comment
Despite relatively clear regulations, a taxpayer who wants to sell particularly valuable movable goods should thoroughly analyze the regulations and the circumstances of their purchase - thanks to which, after ensuring that the statutory criteria are met, he will be able to take advantage of the tax exemption provided for in the PIT act.
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