Suspension and resumption of activities and the right to a lump sum



Taxpayers who conduct business activity in which they do not employ employees may suspend it for a certain period of time for various reasons. The suspension may be caused by a temporary lack of demand for services / goods offered by the entrepreneur or a longer vacation. In the case of sole proprietorship, the entrepreneur must report the suspension on the CEIDG-1 form. In this application, the taxpayer specifies the expected date of resumption of activity and if he decides to resume it, re-submits the CEIDG-1 application for the resumption of activity. In fact, the matter is not complicated. However, there remains the issue of the taxpayer's rights and obligations during the suspension and after the suspension of operations. Is a taxpayer who settled on the basis of a registered lump sum still entitled to use this form of taxation after suspending the activity? So how to account for the activity after the period of its suspension?

First of all, it should be noted that the lump sum is a simplified form of taxation that cannot be used by all taxpayers. A lump sum on registered revenues may be paid by taxpayers who:

  • choose this form of taxation when starting their business,
  • in the previous tax year, they did not obtain revenues from operations in excess of the equivalent of EUR 150,000.

In addition, certain types of activity are excluded.

Taxpayer's rights and obligations during the suspension of operations

If a given entrepreneur uses such a form of taxation as a registered lump sum, he cannot count the expenses as tax deductible costs. The lump sum is paid on the income not reduced by the costs of obtaining it. So the lump sum only keeps a record of revenues.

During the suspension, the entrepreneur:

  • cannot obtain current revenues from activity, but has the right to perform activities necessary to maintain or secure the source of revenues,
  • has the right to accept receivables, as well as the obligation to settle liabilities arising before the date of suspension of operations,
  • has the right to sell company fixed assets,
  • there is no obligation to pay a lump sum,
  • is required to submit an annual tax return.

It is important that during the suspension period, the lump sum is not obliged to pay the lump sum, thus the revenues obtained during the suspension period, e.g. from the sale of assets, will be taxed and settled only after the suspension of activities or at the end of the tax year.

Settlement after the suspension period

Depending on how long the suspension lasts, the dates of tax settlement and payment will differ.

If the suspension begins and ends in one tax year, the taxpayer is obliged to calculate and pay the tax by the 20th day of the month following the suspension month.

If the resumption takes place in December, the settlement should be made by January 31 of the following year.

The tax settlement will be a bit more complicated when the suspension lasting one year includes two tax years. For example, if the activity was suspended in June 2012 and suspended in June 2013, then the settlement for the period of suspension in 2012 should be made by January 31, 2013, and the settlement for the suspension period in 2013 by the 20th day of the month following the resumption month. activity (according to the example, it will be until July 20).

A suspension lasting 2 years should be accounted for in the same way as above, that is:

  • for the year in which the suspension began - until January 31 of the following year,
  • for the next (entire) year of suspension - until January 31 of the following year,
  • for the period of suspension in the year in which the activity was resumed - by the 20th day of the month following the month of suspension.

Form of taxation upon resumption of activity

Pursuant to Art. 9 of the Lump-sum Income Tax Act, if the taxpayer has not reported the liquidation of business activity or has not chosen another form of taxation by January 20 of the tax year, it is considered that he continues to conduct taxable activity in the form of a lump sum on recorded revenues. On the basis of the above, it should be stated that only the liquidation of the activity or the choice of a different form of taxation results in the cessation of lump sum settlements on recorded revenues. The suspension of activity cannot be considered as its liquidation, so if the taxation method has not changed at the initiative of the taxpayer, after the suspension has been made, the taxpayer continues the previously selected form of taxation.