What taxes are paid on an individual entrepreneurship?
Entrepreneurs in Poland are obliged to pay:
- Income tax: PIT-28 or PIT-36L or PIT-36 - depending on the selected taxation system.
- VAT - tax on goods and services, if a person conducting business activity is registered as a VAT payer.
- Contributions to the Social Insurance Institution*
* Are not a tax payment, but are obligatory to be paid every month.
Entrepreneurs in Poland may also have several other tax obligations, e.g.
- Employee payroll tax where a individual entrepreneur employs employees.
- Tax on civil law transactions - «Podatek od cynności cywilnoprawnych».
- Property tax - «Podatek od nieruchomości».
- Tax on means of transport - «Podatek od środków transportowych».
- Ecological tax - «Podatek za korzystanie ze środowiska»
Systems of taxation of individual entrepreneurship in Poland:
1. RYCZAŁT (simplified taxation system) - the tax rate depends on the type of activity, e.g. if it is sales - 3%, construction - 5.5%, IT services - from 8.5 to 12%, etc.
IMPORTANT: In this system In the case of taxation, it is not possible to classify anything as costs, i.e. the tax is paid on the entire turnover (earnings).
The amount of tax ZUS in the system RYCZAŁT depends on how much you earn during the year:
- If your annual income is up to PLN 60,000 - you pay ZUS in the amount of PLN 399,60 per month.
- If you earn from PLN 60,000 to PLN 300,000 per year - you pay PLN 666,00 per month.
- Above PLN 300,000 per year - ZUS is paid in the amount of PLN 1,128.48 per month.
These amounts are valid for the first six months of the «Ulge na Start» (the so-called preferential ZUS for newly registered JDG, when only «ZUS zdrowotny»), then after six months to these rates (399,60 or 666,00 or 1198,80 depending on income) another PLN 371,47 is added («ZUS preferencyjny») - this amount is paid for 2 years.
Thus, there are 2.5 years of ZUS benefits for new JDGs.
After using all benefits, you must pay ZUS in full. At the moment, the full ZUS in this system ranges from PLN 1884,91 to PLN 2684,11 (depending on earnings).
2. PODATEK LINIOWY - lat 19% tax on profit, there is an option to take costs, the tax is paid only on profits.
The amount of ZUS contributions in the PODATEK LINIOWY system is 4.9% of profits per month for the first 6 months («Ulga na Start»), then after six months, another PLN 371,47 is added to 4.9% of profits («ZUS preferencyjny») - this amount is payable within 2 years.
After all benefits have been used, the full ZUS is paid. Currently, the full ZUS in this system is from 1867,09 (depending on your profit).
3. SKALA PODATKOWA - in this system, the tax will depend on the profit: the amount up to 30,000 per year - taxed at 0%, from 30,000 to 120,000 - 12%, from 120,000 - 32%.
ZUS - 9% of monthly income for the first 6 months («Ulga na Start»), then after 6 months another PLN 371,47 is added to 9% of income («ZUS preferencyjny») - this amount is payable within 2 years.
After all benefits have been used, the full ZUS is paid. Currently, the full ZUS for this taxation system starts at PLN 1,630.64 (depending on your profit).
VAT - applies to all taxation systems.
Polish law does not require companies to register as VAT payers in Poland (except for consulting services and activities requiring mandatory VAT registration) if your annual revenue from the sale of goods or services in Poland to Polish customers does not exceed PLN 200,000.
Revenue in the amount of PLN 200,000 is taken into account in proportion to the date of starting your business, i.e. PLN 200,000/12 = PLN 16,666.67 per month, so if you registered your business in December, your limit of revenue from Polish clients is PLN 16,666.67.
The revenue limit does not include the provision of services/sales of goods to contractors from other countries (outside Poland)!
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