Important change in pension rules. The President signs the bill.
- The new regulations on the taxation of annuities will come into force 14 days after the announcement of the act
- Taxpayers can now choose between a one-time settlement of the estimated value of the annuity or a recurring tax payment with each payout
- The previous obligation to pay tax in advance, even if the full amount of the pension was not received, was considered unfavorable and replaced with flexible solutions
As Infor reminds, on July 31, President Andrzej Duda signed the Act of June 25, 2025, which introduces significant changes to the taxation of annuities. The main goal of the new regulations is to simplify tax settlements for the acquisition of property rights involving the obligation to provide recurring benefits, as well as to facilitate the turnover of assets acquired through inheritance or donation.
Previously, taxation of unpaid annuities, often gift-based, involved complex formalities. Tax liability arose upon establishment of the annuity, requiring the filing of an SD-3 declaration within 14 days, or an SD-Z2 declaration within six months for immediate family members. In the case of life annuities, where the total value was unspecified, a 10-year period was assumed to determine the tax base. This was disadvantageous because tax was paid upfront for an amount whose receipt was not guaranteed, and there was no refund of overpaid tax even if the annuitant died before the expiration of that period.
In response to these problems, the Supreme Administrative Court ruled in its resolution of March 31, 2025, that the tax base should be determined as subsequent installments are paid, which—while beneficial for taxpayers—generated significant bureaucracy. The new law aims to alleviate these difficulties and offers two compromise solutions. First, the taxpayer can consent to a single declaration and taxation of the estimated value of the annuity, determined by the tax authority, allowing for all formalities to be completed in one go. Second, if the value cannot be estimated or the taxpayer's consent is lacking, the tax will be paid periodically, as subsequent installments are received, requiring the filing of a declaration with each payment.
Under the amendment, tax liability will arise upon the establishment of benefits, if their value is established or substantiated, or upon the performance of individual benefits in other cases. The act will enter into force 14 days after its publication.
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