Tax limits for small taxpayers and lump sum taxpayers

Both having the status of a small taxpayer and the possibility of settling income tax in the form of a lump sum on recorded revenues are related to not exceeding the limits specified in the regulations.

Tax limits - small taxpayers

In order to be considered a small taxpayer, it is necessary that the turnover limit of EUR 1,200,000 is not exceeded in the year preceding the tax year. The limit is converted into PLN at the average EUR exchange rate announced by the National Bank of Poland on October 1.

In 2014, small taxpayers are taxpayers whose turnover from economic activity in 2013 did not exceed PLN 5,068,000.

In 2015, the amount of the limit, converted into the Polish currency, will be reduced. A small taxpayer in 2015 will be an entrepreneur whose sales value (including the tax amount) in 2014 will not exceed PLN 5,015,000.

Benefits of being a small taxpayer

A small taxpayer has the option of quarterly settlements

Under tax law, small taxpayers have several valuable privileges. One of them is the possibility of quarterly settling income tax. Small taxpayers pay income tax advances by the 20th day of the month following the end of the quarter.

Small taxpayers also have the right to quarterly settlements in the case of VAT. Here, payments are also made 4 times a year, with the difference that not until the 20th but until the 25th day of the month following the end of the quarter (e.g. April 25 for the first quarter).

Small taxpayers - one-time depreciation

Pursuant to Polish law, small taxpayers and entrepreneurs starting business activity in a given year are entitled to a one-off depreciation of fixed assets with a total value not exceeding EUR 50,000. In this case, the given amount should also be converted into zlotys in accordance with the average EUR exchange rate provided by the National Bank of Poland. In 2015, after rounding, it will amount to PLN 209,000. One-time depreciation may be used only for fixed assets included in group 3-8 of the Classification of Fixed Assets, excluding passenger cars.

Tax limits - lump sum on recorded revenues

Taxpayers who:

• they receive income from business activities carried out in person, if the income from this activity in the previous year did not exceed EUR 150,000;

• they earn income only from activities conducted in the form of a partnership, if the sum of revenues of the partners of the company did not exceed the limit of EUR 150,000 in the previous tax year;

• persons starting a business in a given year, either in person or in the form of a company (if they do not use a tax card) - regardless of the amount of income they will achieve this year.

The limits are converted in accordance with the average euro exchange rate announced by the National Bank of Poland at the beginning of October. Revenue limits converted into PLN are presented in the tables below:

2014

Who?	The limit of revenues achieved in the previous year:	Converted into PLN:
Business start-ups	no limit *	no limit *
The rest	150,000 EURO	PLN 633,450

* there are other conditions, the violation of which in the first year of operation may result in the loss of the right to tax with a lump sum on recorded income.

2015

Who?	The limit of revenues achieved in the previous year:	Converted into PLN:
Business start-ups	no limit *	no limit *
The rest	150,000 EURO	PLN 626 880

* there are other conditions, the violation of which in the first year of operation may result in the loss of the right to tax with a lump sum on recorded income.

Lump sum on registered revenues - quarterly settlement

In order to be able to settle accounts with the tax office on a quarterly basis, one condition must be met - the income from business activity taxed with the lump sum may not exceed EUR 25,000 in the year preceding the tax year.

In 2015, the possibility of quarterly settlement will be available to taxpayers whose revenues from non-agricultural business activities for 2014 will not exceed PLN 104,480 (converted into PLN).