Lump-sum tax on recorded revenue

Do you provide services as part of your business? Do you purchase services from individuals in the B2B model?

Lump sum tax on recorded revenue is a simplified form of taxation of your business.

The changes introduced by the Polish Deal [Polski Ład] have made more and more entrepreneurs consider switching to this form of settlement. This results, among others, from the reduction of the lump-sum tax rate for certain services and changes in the calculation of health insurance contributions.

For whom?

The lump sum on recorded revenue may be used by the majority of persons conducting business activity as sole entrepreneurs or in the form of a civil-law partnership or general partnership of natural persons, whose revenue in the previous tax year did not exceed the limit of EUR 2 million (which rule does not apply to persons commencing their business activity).

It is worth remembering that the choice of a lump sum regime for 2022 will not be possible if the entrepreneur provides services to a current or former employer, and the nature of those services correspond to the activities performed under an employment contract in 2021 or 2022.

Lump sum rates

The lump sum rate of 17% applies to revenue generated by freelancers i.e. non-agricultural activity performed in person, among others

translators,
attorneys,
notaries public,
legal advisors,
statutory auditors,
accountants,
insurance agents,
reinsurance brokers or insurance brokers,
tax advisors,
restructuring consultants,
stockbrokers,
investment consultants,
agents of investment companies.

The 15% rate applies to revenue from the provision of, among others, the following services:

management consulting (Polish Classification of Goods and Services ex Chapter 70), other than services provided by freelancers,
financial and insurance services (Polish Classification of Goods and Services section K), other than services provided by freelancers,
legal, accounting and tax advisory services (Polish Classification of Goods and Services chapter 69), other than services provided by freelancers,
real estate administration activities on a fee or contract basis (Polish Classification of Goods and Services 68.3),
advertising; market research and public opinion polling (Polish Classification of Goods and Services chapter 73)
employment-related (Polish Classification of Goods and Services chapter 78)
services related to sport, entertainment and recreation (Polish Classification of Goods and Services chapter 93).

The Polish Deal has introduced two new lump-sum tax rates – 14% and 12%:

The 14% rate applies to revenue from the provision of the following services:

in the field of health care (Polish Classification of Goods and Services chapter 86)
architectural and engineering services, technical research and analysis services (Polish Classification of Goods and Services chapter 71)
specialist design (Polish Classification of Goods and Services 1).

The 12% rate, on the other hand, applies to revenue from the provision of, among others, the following services:

services related to computer hardware consultancy (Polish Classification of Goods and Services 02.10.0),
software-related services (Polish Classification of Goods and Services ex 62.01.1),
services within the ‘Computer software originals’ grouping (Polish Classification of Goods and Services 01.2),
software consultancy activities (Polish Classification of Goods and Services ex 62.02)
installation of software (Polish Classification of Goods and Services ex 62.09.20.0)
supply of computer networks and systems (Polish Classification of Goods and Services 03.1).

The 8.5% rate applies to revenue among others from:

service activities, excluding services for which the act provides a separate lump-sum tax rate,
services in the field of education (Polish Classification of Goods and Services chapter 85),
activities consisting in manufacturing objects (products) from materials provided by the ordering party.

Obligation to keep records of the revenue

Taxpayers who are subject to the lump-sum tax on recorded revenue are obliged to:

keep and maintain evidence of the purchase of goods

keep a list of fixed and intangible assets

keep separate revenue records for each year.

Amount of health contribution vs. lump-sum tax advance

The provisions of the Polish Deal abolished the possibility of deducting health insurance contributions from tax.

In the case of taxpayers taxed as lump sums on recorded revenue, in 2022 9% health insurance premium is paid within 3 revenue thresholds.

Amount threshold	Amount of health contribution
Up to PLN 60.000	9% składka 9% contribution calculated on 60% of the monthly average salary (monthly contribution in 2022 is PLN 335,94).
Between PLN 60,001 and PLN 300,000	9% contribution calculated on 100% of the monthly average salary (monthly contribution in 2022 is PLN 559.89).
Over PLN 300.001	9% contribution calculated on the equivalent of 180% of the monthly average salary (monthly contribution in 2022 is PLN 1007.81).

How much can you save?

Annual revenue (PLN)	Selected form of settlement	Annual net salary in 2022 (PLN)
180,000 (15,000 / month)	Step tax	121 600
	flat PIT 19%	126 300
	Lump-sum tax	134 000
240,000 (20,000 / month)	Step tax	157 500
	flat PIT 19%	172 200
	Lump-sum tax	185 000

How can we help you?

We will calculate how the Polish Deal will affect your salary.

We will help you choose the most effective form of income taxation.

We will tell you which tax reliefs you can take advantage of when being a sole entrepreneur or running a partnership.

We will analyse the current / future model of cooperation with individuals in B2B in terms of tax risk management (PIT, ZUS Social Security Insurance, CIT and VAT) on the part of the company and entrepreneurs.