The tax office is getting better at detecting illegal lettings - how does it work?
Renting out a flat without a written contract and without reporting the income to the Polish Tax Office (urząd skarbowy) was for years a common practice in Poland. Many property owners saw this arrangement as convenient and risk-free. Unfortunately, the reality in 2026 looks completely different - the National Revenue Administration (KAS) now has advanced IT tools that effectively eliminate the grey economy in rentals.
The tax authority's algorithms systematically analyse listings published on popular portals such as OLX, Otodom or Airbnb, and then compare them with bank transfers and property owners' tax returns. Regular payments into a bank account with the reference "rent" or "letting" attract particular suspicion - a single such transfer is enough to trigger an inspection procedure.
It is worth stressing that tax offices have full right of access to taxpayers' bank account histories. This means that even if a listing was removed long ago, the financial trail in the form of bank transfers remains and may serve as key evidence in tax proceedings. The scale of the problem is enormous - the Ministry of Finance estimates that the grey economy covers as many as 25% of owners of rented properties.
The DAC7 Directive - a new weapon against illegal letting
Since July 2024, the DAC7 Directive has applied in Poland, introducing an obligation for booking and listing platforms to report user data. The first reports reached the National Revenue Administration in January 2025, which means the tax authority now holds complete databases of people letting out property through online platforms.
In practice, DAC7 means automatic exchange of information between digital platforms and tax authorities. Portals such as Airbnb, Booking.com and other services that intermediate short-term lets are required to pass on detailed data about landlords - including information on income received, letting periods and owners' identification details.
Property market experts clearly point out that landlords who avoided taxation for years are now legalising their activity en masse. They are not doing so voluntarily, but under pressure from inspections which can go back as far as five years. It is precisely this retrospective nature of the verification that means accumulated tax arrears often reach very high amounts.
What penalties apply for an undeclared flat rental?
The financial consequences of illegal letting are far more serious than most owners assume. The current system of settlement is based solely on flat-rate tax on recorded revenue (ryczałt), which has applied since 2023. The rates are clearly defined:
- 8.5% - for rental income of up to PLN 100,000 per year,
- 12.5% - on the amount exceeding PLN 100,000 of revenue per year.
If the tax office detects an undeclared rental, the property owner must expect several types of charges to accumulate at the same time:
- arrears of flat-rate tax for the entire period of the unsettled letting,
- late payment interest charged from the date the tax fell due,
- an additional penalty charge of up to 75% of the value of the unpaid tax,
- a fine of up to PLN 30,000 in the case of fiscal misdemeanours.
Particularly important from a legal perspective, in the case of larger arrears the matter may be classified as a fiscal offence. The threshold is an amount equal to five times the minimum wage. With the minimum wage standing at PLN 4,806 from January 2026, the maximum fine for a fiscal offence may, in extreme cases, even exceed PLN 46 million.
Limitation of tax liabilities - do not count on the passage of time
Many property owners delude themselves that unpaid tax liabilities will simply become time-barred. The legal reality, however, is far more complex. The standard limitation period for tax liabilities is five years, but it is counted from the end of the calendar year in which the tax payment deadline expired. In practice, this means the actual period of liability can be as long as six or seven years.
Moreover, the tax authority has effective mechanisms for suspending and interrupting the limitation period. One of the most frequently used tools is the initiation of fiscal criminal proceedings, which automatically stops the limitation period running. As a result, tax liabilities may remain due for many years longer than the basic five-year period would suggest.
It should also be remembered that tax authorities have the right to verify tax returns for all periods that are not time-barred at the same time. This means that in a single inspection the tax authority can examine several tax years at once, which in the case of regular, multi-year letting without declared income leads to very significant arrears, together with interest and penalties.
How to protect yourself legally from the consequences - legal advice
The most effective protection strategy is, of course, full legalisation of the letting and ongoing settlement of income. However, for those who have so far let out property without proper reporting, professional legal assistance is crucial. A properly conducted procedure for disclosing arrears can significantly reduce the financial and criminal consequences.
The institution of active repentance
Polish fiscal criminal law provides for the institution of active repentance (czynny żal) (Article 16 of the Fiscal Penal Code), which makes it possible to avoid punishment for a fiscal offence or misdemeanour. The condition is voluntary disclosure of the irregularities before they are detected by the tax authority, together with payment of the outstanding liabilities. Making correct use of this institution, however, requires precise preparation of documentation and appropriate wording of the notification.
Correcting tax returns
A taxpayer has the right to file a correction of the tax return for the years in which they did not declare rental income. The correction should cover all periods that are not time-barred and be combined with simultaneous payment of the outstanding tax together with interest. A correctly made correction significantly reduces the risk of additional penalties.
It is not worth delaying settling your tax position. The longer the delay, the higher the interest and the greater the risk of an inspection being opened by the authorities of their own motion. The implementation of the DAC7 Directive and the tax authority's growing analytical capabilities mean that detection of illegal letting is today a matter of time, not chance.
Do you need legal help with settling your rental income?
If you rent out a flat and are not sure whether your tax returns are correct, do not wait for a tax office inspection. Contact our firm - our tax law specialists will help you assess your situation, prepare the necessary corrections to your returns and, where needed, make effective use of active repentance.
By acting proactively, you can avoid severe financial and criminal sanctions. Book a consultation today - the sooner you act, the greater the chance of a favourable outcome in your case. Our team will give you full support at every stage of the tax proceedings.
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