Blog

Authors:

  • Daniel Reck

    Managing Partner, Duraj Reck & Partners Law Firm

16 February 2024

Do you want to change the form of taxation? You have until February 20

If the entrepreneur was in business in 2023. and wants to change the form of taxation for 2024. It only has until 20 February to submit a written statement in this regard. They should be submitted via the Central Register and Information on Economic Activity (CEiDG) or directly to the relevant tax office – in the case of entrepreneurs who are not subject to entry in CEiIDG.

According to the regulations, personal income tax payers are taxed under the general rules, except by 20. the day of the month following the month in which they generated their first income from non-agricultural business activity in the tax year, or by the end of the tax year, if the first such revenue was generated in December of the tax year, submit a written statement on the choice of the form of taxation of revenues from non-agricultural business activity for a given tax year in the form of a lump sum on recorded revenues or a flat tax at the rate of 19%.

At the same time, taxpayers may notify in writing that they will no longer be taxed on income from non-agricultural business activity in the form of a flat tax or a lump sum tax on recorded income.

Legal basis:

Article 9a(2) and (2a) of the Act of 26.07.1991 Personal Income Tax Act-

Article 9(1) and (1a) of the Act of 20.11.1998 on flat-rate income tax on certain revenues earned by natural persons

In 2024 entrepreneurs settling PIT 2024 can choose from the following forms of taxation:

  • General rules (PIT-36)
  • Flat tax (PIT-36L)
  • Lump sum tax on recorded income (PIT-28)

General rules are the default form of income taxation. In the case of taxation under general rules, income is taxed understood as income less the cost of obtaining it. Taxpayers settling in this form are entitled to a tax-free amount, which currently amounts to PLN 30,000. If a taxpayer earns an annual income exceeding this amount, but not exceeding PLN 120,000, they will be obliged to pay tax at the rate of 12%. On the amount exceeding PLN 120,000 the tax must be paid according to rate of 32%.

The health insurance contribution for entrepreneurs on the tax scale is calculated on income and amounts to 9% of the assessment base.

By choosing the linear method of settling income tax, the taxpayer will be obliged to pay income tax (income less the costs of obtaining it). Regardless of the amount of income earned, the flat tax rate is 19%. In the case of the rope method, the taxpayer is not entitled to a tax-free amount.

The health insurance contribution for entrepreneurs settling with the straight-line method is calculated on income and amounts to 4.9% of the assessment base.

A lump sum on recorded income can be settled by taxpayers who in the previous tax year earned income not exceeding EUR 2,000,000.

Tax rates in this case vary (from 3% to 17%) and depend on the subject of the business. However, the tax is calculated on the income.

The health insurance contribution for entrepreneurs settling with a lump sum is determined by the amount and depends on the revenue generated in the year. The rates for 2024 are:

  • PLN 419.46 per month (annual revenue up to PLN 60,000)
  • PLN 699.11 per month (after earning between PLN 60,000 and PLN 300,000)
  • PLN 1,258.39 per month (as a result of exceeding the revenue of PLN 300,000).

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