Tax obligations in the event of the entrepreneur's death


When deciding to run a business, unfortunately, you have to take into account random events that may lead to the death of the taxpayer - the owner of the enterprise. The consequence of this is the takeover of the company along with the value of the estate by the heirs of the deceased. However, what formalities do they have to ensure and how to settle tax obligations after the taxpayer's death?

Do I have to file tax returns for a deceased entrepreneur?

Pursuant to the provisions of the Civil Code, the subject of law is a natural person from birth to death. Thus, tax regulations imposing a tax obligation on a natural person will expire upon death. Pursuant to the Act of 13 October 1995 on the principles of registration and identification of taxpayers and payers (NIP), the tax identification number expires in the event of death or termination of the taxpayer's legal existence (Article 12 (2)). The minister competent for internal affairs, after registering a natural person in the PESEL register, is obliged to immediately transfer from this register to the Central Register of Entities - the National Register of Taxpayers information on the date of death.

In the case of taxpayers running an individual business, pursuant to art. 12 sec. 3 of the NIP Act, the authorities keeping the population register are obliged, within 14 days from the date of receipt of the death certificate, to provide information about the death to the head of the tax office competent for the last place of residence of the deceased taxpayer.

It follows that submitting all declarations (PIT, VAT) is inappropriate, because this obligation was imposed on the taxpayer, and it ceased with his death.

Art. 96 sec. 6 of the VAT Act specifies that if a taxpayer registered as a VAT payer has ceased to perform taxable activities, he is obliged to report the cessation of activity to the head of the tax office, and if the cessation of activity occurred as a result of the taxpayer's death, in accordance with art. 96 sec. 7 of the Act, the notification of the cessation of activity is made by his legal successor.

The obligation to prepare a physical inventory and the death of the entrepreneur

According to the provisions of Art. 14 sec. 5 of the VAT Act, it does not provide for the preparation of a physical inventory in the event of the taxpayer's death. Therefore, the legal successor - the heir, is not required to prepare a liquidation inventory and pay the tax due. This is also due to the fact that the physical inventory is treated as a taxpayer's liability that arose after his death, and thus the heirs are not responsible for it.