Lump sum on registered income
January 9, 2023
A lump sum on registered income is considered one of the simpler forms of taxation. It does not allow the settlement of tax deductible costs. In the case of a lump sum, the revenue is subject to taxation, not income. Therefore, a lump sum may be profitable for those people who do not incur high expenses related to their business activity.
Who is the lump sum for?
Taxation in the form of a lump sum on registered income can be used by:
- natural persons running sole proprietorships
- civil and general partnerships whose only partners are natural persons
– whose revenues in the previous tax year did not exceed the limit of EUR 2 million (approx. PLN 9,654,400)
Starting from January 1, 2023 the lump sum on registered income will be the only form of taxation of income obtained from the rental of residential real estate.
The lump sum cannot be used by persons who:
- pay tax in the same year in the form of a tax card
- benefit from a periodic income tax exemption
- run pharmacies, exchange offices, sell car parts and accessories
- produce products subject to excise duty (except for the generation of electricity from renewable energy sources)
Learn more abour forms of taxation available in Poland:
How to choose lump sum taxation?
Persons wishing to opt for taxation of their income must notify the proper head of the tax office of this fact.
- by the 20th day of the month following the month in which the first income from business activity is obtained in a given tax year
- by the end of the year if the first income is earned in December of that year.
A statement on the choice of lump sum taxation can be submitted directly to the tax office or by updating the entry to CEIDG.
Lump sum rates on registered income depend on the type of activity performed:
1) 17% when it comes to revenues generated in case of independent professionals activity
Independent professionals activity is considered to be business activity performed personally by translators, advocates, notaries, legal advisors, statutory auditors, accountants, insurance agents or tax advisors
2) 15% in the case of revenues generated, inter alia, in the provision of the following services:
- brokerage in the sale of motorcycles, parts and accessories
- wholesale brokerage
- related to sport, entertainment, culture and recreation
- advertising, market and public opinion research services
3) 14% for revenues from the provision of the following services:
- in the field of health care
- architectural and engineering services, research and technical analysis services
- in the field of specialized design
4) 12% revenues from the provision of services:
- related to the publishing of computer game packages, system software packages, application software packages, computer software downloaded from the Internet
- related to consulting in the field of computer hardware and software, in the field of software installation related to network management and IT systems
5) 10% revenues from the provision of services in the field of buying and selling real estate on one’s own account
6) 8,5% revenues up to the amount of 100 thousand PLN and 12.5% of revenues from the surplus over PLN 100,000. PLN for rent
7) 8,5% in case of:
- revenues from the sale of alcoholic beverages
- revenues from the provision of education services
- commission, obtained by the entities running the commission shop
8) 5,5% in case of:
- revenues from construction works
9) 3% in case of:
- gastronomic activity
- trade service activity
Important! If we run an activity subject to different flat-rate tax rates, we are obliged to keep records which will clearly show the amount of income earned under each rate. If such records are not kept, the lump sum will be calculated based on the 8.5% rate – with the proviso that if a specific activity is taxed at a rate higher than 8.5%, the higher rate applies, i.e. 17%, 15%, 14%, 12.5%, 12% and 10%.
How to pay a lump sum?
If we choose taxation in the form of a lump sum, we will be obliged to calculate it and pay it in due time:
- by the 20th day of the following month for the previous month
- for December – by January 20 (an important change here, compared to the wording of the regulations in force in the first half of 2022, according to which the lump sum for December was payable on the date of submitting the annual return)
It is also possible to pay a lump sum on a quarterly basis if:
- we start conducting activities taxed in the form of a lump sum on registered revenues or
- in the previous year, as part of activities conducted independently or in the form of a company, we achieved revenues not exceeding EUR 200,000
The annual settlement
Persons who have decided to tax their revenues in the form of a lump sum on registered revenues settle their tax returns from February 15 to the end of April of the following year, using the PIT-28 tax return.
Important! If we choose lump sum taxation on registered income::
- joint taxation with a spouse or with a child is impossible
- we will not deduct the child allowance.