Ryczałt — the registered lump-sum tax is one of the available forms of income taxation (alongside taxation on the tax scale, flat-rate tax, or tax card). When choosing a form of taxation, the person concerned should take into account the company's projected profits, the tax burden (tax rates), and the costs incurred to earn that income. The nature of the business activity also matters. After a thorough analysis of the above factors, choosing a form of taxation should not cause any problems. For a person starting a business, the choice of the form of taxation is made by submitting a CEIDG-1 application at any city or municipal office. A change to the form of taxation must be reported by the 20th day of the month following the month in which the first income was earned, either in a CEIDG-1 change-of-entry application or in a declaration to the head of the tax office.
If taxpayers start their activity during the year, the choice of the form of taxation is reported by the date of filing the CEIDG registration application.
ATTENTION! If the taxpayer misses this deadline, they will be settled under the general rules according to the tax scale.
The registered lump-sum tax can be used in the following situations:
- when earning income from non-agricultural business activity (sole proprietorship, civil-law partnerships of natural persons, and general partnerships of natural persons),
- when income is earned by natural persons practising liberal professions; the list of these professions is strictly defined (physician, dentist, veterinarian, dental technician, midwife, nurse, translator, teacher providing educational services during class time),
- when earning income from rental, sublease, lease and similar agreements between natural persons, provided such agreements are not concluded as part of a business activity,
- when clergy earn income.
Exclusions from the lump-sum tax
However, not everyone may use this form of taxation. The regulations provide for a number of exclusions.
Subjective exclusions:
- taxpayers settling under the tax card,
- taxpayers temporarily exempt from income tax,
- taxpayers whose output is subject to excise duty,
- taxpayers who, before choosing the lump-sum tax in a given tax year, conducted business activity under the general rules (either independently or with a spouse)
- taxpayers who will provide the same type of services as within the employment relationship in which they were engaged before starting their own business activity
Object-based exclusions:
- taxpayers running pharmacies,
- taxpayers running a pawnshop,
- taxpayers operating a foreign currency exchange point,
- taxpayers practising liberal professions other than those listed in the Act,
- taxpayers conducting activity in the trade of car parts,
- taxpayers providing services listed in Annex No. 2 to the Act on the Flat-Rate Income Tax on Certain Income Earned by Natural Persons of 20 November 1998,
Documentation
When using this form of taxation (the lump-sum tax), the taxpayer is required to keep records of income separately for each tax year. On the basis of these records, the amount of tax due to be paid into the tax office's account is determined — monthly or quarterly (depending on how the taxpayer has notified the tax office). It cannot be reduced by the costs of earning income. The lump-sum income tax (PPE) is calculated on the basis of the income earned less the ZUS contributions paid. The tax must be paid into the tax office's account by the 20th day of the month for the previous month/quarter. The taxpayer is not required to file a tax return. The procedure for keeping the said records is set out in the provisions of the "Regulation of the Minister of Finance of 17 December 2002 on the keeping of income records and the list of fixed assets and intangible assets". In addition to the income records, the taxpayer keeps a register of fixed assets and intangible assets, an equipment ledger, and retains documents of goods acquisition. If they are also an active VAT payer, they additionally keep VAT sales/purchase registers and submit the VAT-7 declaration to the tax office. Simplified algorithm for calculating the lump-sum income tax:
- income – social insurance = taxable income
- taxable income × lump-sum rate = tax
- tax – deductible health insurance (7,75% of the 9% base) = tax due
Where a taxpayer earns income taxed at several rates, they should calculate the percentage share of that income in total income and, on this basis, calculate the corresponding share of the social insurance contribution (share of income taxed at a given rate/total income). × 100%; then the total social insurance contribution * the calculated percentage share = the amount of the contribution attributable to that share of income).
Fixed rate
Depending on the field of activity, the amount of the lump-sum tax varies:
2% - revenue from the sale of non-industrially processed plant and animal products from one's own cultivation, breeding or rearing,
3% - catering and service activities (trade), animal husbandry, fishing, revenue from the sale of fixed assets included in the enterprise's assets,
5,5% – construction activity, transport services, manufacturing activity,
8,5% - rental, sublease, lease and other agreements of a similar nature up to the amount equivalent to 4000 euro, income from service activities, including catering activities as regards revenue from the sale of beverages with an alcohol content above 1,5%, and — outside the entities of items 2 and 3 — services related to botanical gardens, zoos and protected nature sites, commission earned under a commission agreement, commission earned under a distribution agreement, running kindergartens and extracurricular institutions at primary schools
17% – accommodation services, brokerage in the sale of cars and their parts, parking services, computer hardware consultancy, tourism brokerage, rental of passenger cars and other means of transport
20% — income from liberal professions
After the end of the tax year, by the end of January of the following year, the lump-sum tax is calculated on the income earned in the previous year under the lump-sum regime. For this purpose, the taxpayer files the annual PIT-28 tax return. If you choose to pay the lump-sum tax, you cannot file taxes jointly with your spouse or under the arrangements provided for single parents. Income from other sources (e.g. from an employment contract) is settled on general principles in accordance with the PIT rules.
https://www.biznes.gov.pl/pl/portal/00263
Loss of the right to the registered lump-sum tax
As of 1 January 2017, an entrepreneur paying the lump-sum tax and exceeding the revenue limit of 250 000 euro during the year loses the right to the lump-sum tax from the start of the following year. For example, a person who exceeded the limit in 2017 will be required, as of 1 January 2018, to keep the Revenue and Expense Ledger on general terms.