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CHANGES OR REMINDERS FOR 2025
1) Introduction of cash-based PIT for sole proprietorships
~a) Entities entitled to elect cash PIT~- conditions:
~- revenues~ from self-employment* in the year immediately preceding the tax year ~did not exceed the equivalent of PLN 1,000,000~, and
- no books of account are kept in connection with the business, and - ~a written statement on the choice of the cash method shall be submitted to the head of the tax office by February 20 of the tax year,~ and in the case of a taxpayer starting a business during the tax year by the 20th day of the month following the month of commencement.
The form of taxation is arbitrary-tax scale, flat tax or lump sum-everyone will be entitled to file a cash PIT.
) Self-employment does not mean that the taxpayer cannot employ workers in this activity. This means, however, that the right to cash PIT will not be given to persons conducting business, such as in the form of a civil partnership or general partnership* ~b) What is cash PIT? ~ It is analogous to the existing VAT cash settlement ie: ~Tax income arises on the date of payment of the amount due~ i.e. we receive any payment* for our services/goods - PIT taxable income arises. ) here the essence is in the payment, it doesn't matter whether it's part or all of it, whether it's an advance payment before the service or a payment after the service, whether there's an invoice or not.*
The same zada works on the expense side i.e. ~deductible expenses, and thus the reduction in the tax base of PIT will be on the date of payment for the cost/invoice.~.
As the Ministry of Finance points out: (...) The principle will be to deduct costs in the tax year of settlement of the liability, in case these costs result from transactions to which another entrepreneur is a party and were incurred in the tax year in which the taxpayer applies the cash method. The principle of deducting costs in the tax year of settlement of the liability will apply both to costs documented by invoices and in any other manner prescribed by law. If the liability is settled before the date the expense is incurred, such as the date of the invoice, the deductible expense will be deducted on the earliest date it is incurred, such as the date of the invoice. Costs will be deducted in the amount in which the liability was paid. Thus, the cost will also include, for example, paid advances, prepayments, installments. (...)
~c) Additional regulations to cash PIT:~. - Income will arise on the date of payment, but no later than 2 years from the date of the invoice.
- Such settlement will apply only to transactions documented by invoices, between businesses/companies. Sales to individuals will be accounted for in income according to current regulations, regardless of payment.
- Cash PIT will exclude income received from the sale of tangible and intangible assets. This will be accounted for in income according to current regulations, regardless of payment.
- If the revenue limit is exceeded in a given year, in which the cash PIT will be applied, the loss to its application will take place only from the next tax year.
2) Tax thresholds and free amount unchanged (there will be no increase) ie:
Tax thresholds 12% up to 120tys PLN income, 32% on the excess over 120tys PLN.
Tax-free amount= 30tys PLN
3) New minimum wages
As of January 2025: - minimum wage of PLN 4666 gross (net that is, "on hand" will come out to PLN 3510.92),
- a minimum hourly rate of PLN 30.50 gross (for contracts of mandate).
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4) Vacation from Social Security
~When is the first vacation from Social Security? ~ Applications can be submitted from November 1, 2024. The first month in which you can take a vacation from Social Security is December 2024.
~Who can benefit ~ Entrepreneurs registered in CEIDG (sole proprietorship and partners in a civil partnership) reported with code: - 05 10, - 05 70, - 05 90, regardless of the chosen form of income taxation.
~What is the period of use of the relief? ~ A vacation from Social Security can be used for one month in a calendar year.
~What conditions must be met ~ An entrepreneur must meet the following conditions in order to take a vacation from Social Security:
- in the calendar month preceding the month of application, was subject to pension, disability and accident insurance by virtue of his business activity,
- in the month preceding the month of application, reported no more than 10 people for social insurance or health insurance,
- did not exceed revenue of €2,000,000 in one of the two previous years,
- in the previous calendar year or in the year of application, is not engaged in business activities for a former employer for whom, in the year of commencement of the activity or the year before, he performed activities falling within the scope of the current activity.
~What is the amount of exemption? ~ The amount of exemption from Social Security depends on the amount of social contributions paid in the month indicated in the application. The exemption covers only social contributions (along with voluntary sick pay, if declared) and FP and FS contributions. The exemption does not apply to health premiums and it is the entrepreneurs' responsibility to pay them.
~When and how to apply ~ The application for exemption from payment of premiums for a designated month (RWS) is submitted by the PUE/eZUS. The application must be submitted in the month preceding the month you choose to use the exemption.
~Does a Social Security vacation affect Social Security benefits? ~ A contributory vacation will not affect entitlement to sick pay or pension benefits.
~What will be the tax consequences of the Social Security vacation?
The amount of premiums not paid by the entrepreneur will be exempt from tax. Thus, it will not generate a tax liability for a gratuitous benefit or a form of subsidy here.
However, these contributions will not be deductible from income or treated as a tax-deductible expense because the tax base can only be reduced by the actual contributions paid. Therefore, in the month following the month in which you take your Social Security vacation, the amount of your PIT advance payment may be slightly higher.
~https://www.zus.pl/-/wakacje-sk%C5%82adkowe-zwolnienie-z-op%C5%82acania-sk%C5%82adek-zus~
5) Mandatory reporting of JPK files to the Tax Office.
It will concern reporting from accounting ledgers (JPK_KR_PD- a new structure adapted to CIT) or tax ledgers (JPK_PKPiR and JPK_EWP) and JPK_ST_KR files (a new structure for reporting records of fixed assets and intangible assets)
The new duties will be implemented according to a schedule for fiscal years:
1) starting from 2025 for tax capital groups and CIT taxpayers whose revenue in the previous tax year exceeded €50 million (JPK_KR logical structure),
~2) as of 2026 for all VAT registered companies~ (JPK_KR, JPK_PKPiR and JPK_EWP logical structures),
~3) from 2027 all other companies i.e. entities not registered for VAT~ (logical structures JPK_KR, JPK_PKPiR and JPK_EWP)~.~.
6) New regulation on cash registers (fiscal cash registers)
~The fiscal cash register exemption up to a revenue of 20tys PLN unchanged.
~There are new goods and services that are required to be recorded with a fiscal cash register~ such as: - Cannabis or smoking products; with ethanol (above 50%) in the composition of the type solvents, de-icing fluids, etc.; coal and similar fuels for heating purposes
- goods using automatic sales devices that accept payment and dispense goods in an unmanned system (vending machines).
- Parking services for cars and other vehicles,
- services using customer-operated devices, including ticket-issuing devices, which also in an unmanned system accept payment in coins or banknotes, or other form (cashless)
We would like to remind you that the cash register exemption currently cannot be used for:
1) Supplies: - Liquefied petroleum gas ; engines, bodies, engine parts and accessories ; trailers and semi-trailers, containers
- computers, electronic and optical products and electric motors, generators and transformers ; photographic equipment ; recorded and unrecorded digital and analog data carriers
- precious metal products
- Tobacco products ; alcoholic beverages with an alcohol content of more than 1.2%,
- perfumes and toilet waters
2) Provision of services: - passenger transportation in automobile transport, cabs
- Repair of motor vehicles and mopeds, repair and replacement of tires, in the field of testing and technical inspections of vehicles, washing, cleaning of cars and similar services in an unmanned system
- regarding medical care provided by doctors and dentists
- legal and tax consulting,
- food-related
- hairdressing, cosmetics and cosmetology,
- Admission to circus shows, admission to amusement parks, theme parks, discos, dance halls,
In addition, entrepreneurs will not have to integrate online cash registers with payment terminals, Penalties for non-integration will also be abolished, according to a draft amendment to the VAT law. The requirement, still introduced by the Polish Deal, never went into effect because it was immediately postponed.
7) VAT exemption for small businesses across the EU (SME Procedure)
Currently in Poland, we have in the law a VAT exemption under Article 113 of the VAT Act for entities whose revenues in a given fiscal year did not exceed PLN 200tys (at this point there will be no increase in this limit next year). Up to this limit, the Polish entrepreneur/entity does not have to register for VAT and may use the so-called entity exemption from VAT. This limit will now also apply to foreign EU entities selling goods or services in Poland, but also to Polish entrepreneurs selling in other EU countries (the value of the exemption, however, depends on the country).
The so-called SME Procedure is coming into force, which will allow small companies based in Poland to take advantage of VAT exemptions in force in other EU countries. This means that an entrepreneur from Poland who meets certain conditions will be able to take advantage of the VAT exemption in force in, for example, Germany or France. Similarly, entrepreneurs from other EU countries will be able to take advantage of the VAT exemption applicable in Poland.
Conditions for using this procedure: - be a small or medium-sized entrepreneur with an annual turnover of less than €100,000 throughout the EU.
- file a notification of intent to use the exemption with the Supreme Tax Office Warsaw-City Center and obtain an EX identification number
You will then have to submit quarterly information to the Polish Office on the amount of turnover in EU countries.
8) Other changes in VAT
The draft stipulates that starting January 1, 2025:
a. Change of place of supply of services in the field of culture, arts, sports, science, education, entertainment transmitted or made available virtually provided to taxpayers (remote participation).
b. Changes in VAT rates from 2025. - More technical on specific type goods/services: - 0% extension to rescue vessels
- Maintenance 8% for medical devices
- lowering to 5% for mentrusion cups
- liquidation of 8% for the supply of live equines
- 23% for seed hemp products
c. Extension of reverse charge for gas, energy supplies, etc.
9) Minimum tax 10% for legal entities - this is already in effect for the 2024 annual tax return.
As a reminder:
The provisions of the minimum tax do not apply to taxpayers corporate income tax: - in the tax year in which they began operations and in the two consecutive tax years immediately following that tax year,
- Which are financial enterprises,
- if they earned revenues in the tax year that were at least 30% less than the revenues earned in the tax year immediately preceding that tax year,
- whose shareholders, stockholders or partners are exclusively natural persons and if the company does not hold shares (stocks) in the capital of another company (...).
New minimum income tax (CIT) of 10% of the tax base dedicated to companies, as well as tax capital groups that: - incur losses* from a source of income other than capital gains, or
- achieved a share of income from the source of revenue, in revenue (other capital) of not more than 1%
*For the purpose of calculating the loss and the share of income in income, costs arising from the acquisition or improvement of fixed assets that are included in the tax year as deductible expenses, including through depreciation, are not taken into account.
The tax base for the minimum tax will be based on 4 elements, and its determination will involve a series of activities based, both on EBITA and deferred taxes related to intangible assets.
- Who they apply to, details of calculation and payment - the first time the rules are applied in the annual return for 2024.
*10) Introduction of a global minimum tax (Pillar 2)*
Applies to companies belonging to Polish or international groups with revenues of at least €750 million (in two of the last four years). Pillar 2 is intended to impose a compensating tax on large international corporate groups so that the group's effective tax rate in a given country is no lower than 15%.
11) Property tax - changes
The most important changes concern the definition of the terms "structure" and "building." The draft stipulates that there will be an autonomous definition of the term "building" in the Law on Local Taxes and Fees. There will no longer be reference to non-tax regulations (construction law). Categories of objects qualified as structures have been included in the new Appendix 4 to the Local Taxes and Fees Law.
Taxation of garages will be unified. Their owners will pay tax at a low residential rate (at present, some are taxed at a much higher rate - on so-called buildings or their remaining parts).
12) Limits for 2025:
A small VAT taxpayer is: - taxpayers-intermediaries (i.e., e.g., taxpayers operating brokerage firms, investment fund managers), if the amount of commissions or other forms of remuneration for services rendered gross in 2024 did not exceed PLN 193,000 ,
- other taxpayers with gross sales value in 2024 not exceeding PLN 8,569,000. The status of a small taxpayer in VAT gives the right, for example, to: settle on a cash basis, to settle VAT quarterly, (with the exception of companies settling Estonian CIT, here the limit = PLN 17,138,000). Small taxpayer PIT and CIT In 2025, a small taxpayer is one whose:
- revenues for 2024 will not exceed PLN 8,569,000 gross
- current revenues in 2025 will not exceed €2 million (excluding applicable VAT) - at the exchange rate on the first working day of January 2025.
The status of a small taxpayer in CIT gives the right to apply the reduced CIT 9% (instead of 19%).
In addition, small PIT and CIT taxpayers and taxpayers starting a business, in connection with the acquisition of a fixed asset, have the right to take advantage of preferential depreciation up to the limit of EUR 50,000 or the rules for one-time depreciation of brand new fixed assets (up to PLN 100,000). They must make a choice in this regard. The limit for one-time depreciation in 2025 will be PLN 214,000.
Limit to lump sum on registered income
Taxpayers can choose to settle in a lump sum if they earned income in the previous tax year: - from exclusively self-employed business activities in an amount not exceeding €2,000,000,
- income exclusively from activities conducted in the form of a company, and the total income of the company's partners from these activities did not exceed the amount of EUR 2,000,000.
In 2025, the revenue limit that will determine eligibility for the lump sum on registered income will be 8,569,200 (currently it is PLN 9,218,200). On the other hand, the right to quarterly lump sum settlement will be available to taxpayers whose revenues will not exceed the equivalent of 200,000 euros, or 856,920 zlotys, in 2024. Taxpayers who exceed these limits during 2025 will not lose their right to lump-sum taxation and quarterly lump-sum payment during the year.
Limit to mandatory bookkeeping
According to the provisions of the Accounting Act, full accounting is required to be kept by individuals, civil partnerships, general partnerships, partnerships - if their revenues for the previous fiscal year amount to at least the equivalent in Polish currency of €2,000,000 - this is currently the case, but there is already a draft increasing this amount to €2.5 million from 2025.
For now, in 2025, the books of accounts will be kept by entrepreneurs if their income for 2024 is at least PLN 8,569,200. As the bill enters into force there will be an increase in the limit to PLN 10,711,500.
13) We are still waiting for final information on what to do with the health premium in 2025-as soon as there are already confirmed regulations-we will prepare a separate summary.
If you have additional questions- feel free to contact us.
TALENTED Accounting Team
