Loans transferred from Poland to a German subsidiary are subject to civil law transaction tax (PCC) – Supreme Administrative Court (NSA) ruling

The issue of cross-border loans being subject to civil law transaction tax raises many questions, especially when the funds are transferred in non-cash form and the parties to the agreement are based in different countries. In such situations, it is essential to determine whether the subject of the agreement is money regarded as property located in Poland or a property right exercised abroad.

In its March ruling, the Supreme Administrative Court in Poland took a position on this issue, indicating how loans granted in the form of a transfer should be treated. This ruling may be relevant to the assessment of financial transactions within capital groups and to the practice of applying civil law transaction tax (PCC) regulations in the case of cross-border loans.

---

The essence of the dispute

The case concerned a loan granted by a Polish subsidiary to its parent company based in Germany. The funds were transferred from a bank account in Poland to an account in Germany.

The applicant, a German company, requested an individual interpretation, indicating that the planned loans should be treated as property rights exercised abroad. In its opinion, there were no grounds for taxation with civil law transaction tax, because the recipient of the loan is based outside Poland and the subject of the agreement is not located on its territory.

The company’s argument was based on two premises:

• money in non-cash form should not be classified as an item, but as a property right,
• the place of performance of a monetary obligation should be determined in accordance with Article 454 § 1 of the Civil Code, i.e. at the creditor’s registered office – in this case in Germany.

According to this reasoning, the planned loans would not meet the criteria specified in Article 1(4) of the Civil Law Transactions Tax Act and would remain outside the scope of civil law transaction tax in Poland.

---

From tax interpretation to the first-instance court ruling

The German company requested an individual interpretation from the Director of National Tax Information, the institution responsible for official explanations of tax regulations. In October 2022, the authority stated that the company’s position was incorrect. It ruled that money, including in the form of a transfer, should be treated as property, and since the funds were in an account in Poland, the loan agreement should be taxed under the civil law transactions tax (PCC).

The company disagreed with this assessment and referred the case to the Provincial Administrative Court in the Polish city of Gliwice, which hears complaints about tax interpretations in the first-instance. In its judgment of 26 July 2023 (I SA/Gl 1698/22), the Provincial Administrative Court upheld the authority’s position. It emphasised that the method of transferring funds – in cash or by bank transfer – does not change their nature.

In its justification, the Provincial Administrative Court noted that at the moment of ordering the transfer in Poland, the lender loses the ability to dispose of the funds, and the borrower’s bank account is credited with the funds. The mere fact that the destination account is located in Germany does not mean that the subject of the loan becomes a property right exercised abroad.

The judgment of the court of first-instance was then appealed to the Supreme Administrative Court.

---

Supreme Administrative Court (NSA) ruling – second-instance decision

The case was referred to the Supreme Administrative Court, which, in its judgment of 12 March 2025 (III FSK 1670/23), dismissed the German company’s cassation appeal and upheld its previous position.

The court confirmed that granting a cash loan does not require the physical transfer of banknotes. It may also take the form of a bank transfer or other non-cash transfer. From the point of view of civil law transaction tax regulations, the method of transferring funds is irrelevant – what is crucial is that the subject of the agreement remains the money located in Poland at the time of the transaction.

The Administrative Court underlined that the tax obligation in civil law transaction tax occurs at the moment of concluding the loan agreement, i.e. when the creditor transfers ownership of a specific amount of money to the beneficiary. In such a situation, there can be no question of a property right exercised abroad – the subject of the transaction is money located in Poland.

The Supreme Administrative Court’s ruling finally resolved the case and confirmed the position of the tax authority and the court of the first-instance.

---

What does the ruling mean for taxpayers?

The ruling of the Supreme Administrative Court in Poland has significant practical implications for companies providing financing to foreign entities, particularly within a single capital group. Until now, case law and tax interpretations have included positions according to which non-cash loans were treated as property rights. As a result, if the service was performed abroad, the transaction could remain outside the scope of civil law transaction tax (PCC).

The Supreme Administrative Court confirmed that money transferred by bank transfer should also be treated as located in Poland if the funds were deposited in a domestic account at the time of the transaction. This means that loans granted by Polish companies to foreign entities – even if the funds ultimately end up abroad – may be subject to PCC in Poland.

In practice, this ruling requires a re-examination of intra-group financing transactions. It is worth checking whether a PCC tax liability arises in similar situations and taking this risk into account when planning new loan agreements.

---

The ruling of the Supreme Administrative Court of March 2025 confirmed that the form of transfer of funds under a loan is irrelevant for the purposes of civil law transaction tax. Also, a non-cash transfer from an account in Poland to a foreign account is subject to civil law transaction tax if, at the time of concluding the agreement, the funds were located in Poland.

For entrepreneurs, this means that they must carefully analyse the tax consequences when financing related entities, especially in intra-group transactions. The ruling of the Supreme Administrative Court is in line with the case law underlining the broad understanding of a cash loan as an activity subject to civil law transaction tax.

If you have any doubts regarding the settlement of this type of transaction, it is worth consulting tax advisors to avoid the risk of incorrect tax settlement.

---

If you have any further questions or require additional information, please contact your business relationship person or use the enquiry form on the HLB Poland website.

Contact us »

***