E-book: Lump sum on recorded revenues

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Lump sum is one of the most popular forms of taxation used by entrepreneurs. Its main advantages include low tax rates and easy calculations.

Lump sum - tax base

The tax base for the lump sum on recorded revenues is only the taxpayer's income. An entrepreneur using this form of taxation when calculating the tax to be paid to the Tax Office account does not take into account tax deductible costs. The only thing that can be deducted is the insurance premiums paid in a given period.

Lump sum - what rates?

Lump sum rates depend on the type of business activity and are as follows:

  • 3%,
  • 5,5%,
  • 8,5%.

In some cases, these rates are higher and represent 17% or 20% of revenue.

The right to tax with a lump sum

The Lump-sum Income Tax Act defines the types of activity that absolutely cannot benefit from lump-sum taxation (e.g. pharmacies).

Taxpayers taxed with a lump sum must, however, remember about the limit of revenues beyond which the use of this form of taxation will not be allowed.

New entrepreneurs who want to tax their income with a lump sum must report this fact when registering their business on the CEIDG-1 form.

On the other hand, taxpayers who have been operating on the market for a long time and would like to change the form of taxation into a lump sum must report such a decision to the head of the competent tax office by January 20 of the new tax year.

Lump sum and annual settlement

Entrepreneurs with lump sum taxation for settlement periods (months, quarters) are only required to calculate and pay the tax due to the tax office. However, after the end of the year, an entrepreneur taxed with a lump sum is obliged to submit PIT-28 by the end of January.

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