Last year, the lump sum became an extremely popular form of taxation of business income. People renting apartments privately also have to pay a lump sum. We often deal with the combination of private businesses and rentals. How does the issue of ZUS deduction look like then? What results from this combination of different revenues? In the configuration of business and lease, filling out PIT may prove problematic in some aspects.
Business and rental- one PIT-28 statement
An entrepreneur running a business activity settled on a lump sum basis and also renting a private apartment should include both of these sources of income in one PIT-28. Despite many doubts that had previously appeared in this respect, the tax office confirms this position in tax rulings. Let’s take a look at the tax ruling of March 29, 2023, ref. 0114-KDIP3-2.4011.90.2023.5.MJ.
BUSINESS AND RENTAL – ZUS DEDUCTION
Since the lump sum regulations allow (under certain conditions) the deduction of ZUS contributions, it seems natural that these contributions should be deducted from business income. However, it is not that obvious for the tax office.
ZUS DEDUCTION – social contributions
Generally, the provisions of the Polish act on flat-rate income tax on certain income earned by natural persons are clear here.
Art. 11. 1. A taxpayer obtaining the revenues specified in Art. 6 section 1 (here: business activity), 1a (here: private rental) and 1d, who pays a lump sum from recorded revenues, may deduct from the revenues the loss referred to in Art. 9 section 3-3b of the Income Tax Act, and the expenses specified in Art. 26 section 1 point 2 (here: social security contributions), 2a, 2b, 2c, 5–6a and 9, art. 26h paragraph 1 and art. 26hb section 1 of the Income Tax Act, if they were not deducted from income or were not included in tax-deductible costs pursuant to the provisions of the Income Tax Act.
However, in accordance with Art. 11 section 3:
If the taxpayer obtains the revenues listed in Art. 6 section 1, 1a or 1d, taxed at different rates, and makes deductions from revenues, these deductions are made from each type of revenue in the same proportion as the individual revenues taxed at different rates in the total amount of revenues in the tax year.
In other words, in our situation, deductions (from income) of social contributions should be made proportionally: (a) in relation to income from business and (b) in relation to income from private rental.
ZUS DEDUCTION – health contributions
In this case, we will not have to (or even be able to) make such a proportional deduction. Pursuant to the content of art. 11 section 1a:
Revenue referred to in Art. 6 section 1 (here: business activity), may be reduced by 50% of health insurance premiums paid in the tax year pursuant to the Act of August 27, 2004 on health care services financed from public funds (Journal of Laws of 2021, item 1285, as amended):
1) for non-agricultural business activities taxed as a lump sum on recorded revenues,
2) for persons cooperating with a taxpayer taxed as a lump sum on recorded revenues
– if they have not been returned to the taxpayer in any form.
In other words, this deduction applies only to business income.
Business and rental- other issues
We have already written about other issues that should be taken into account when choosing a lump sum:
We also wrote previously about rental taxation:
How can we help?
We support our clients by verifying the possibility of applying a more favorable lump sum rate in their business activities (analysis of the contract and performed activities, preparation of opinions for the Central Statistical Office, applications for interpretation to the National Tax Administration, and changes in the Central Register and Information on Economic Activity).
In more complicated cases or if you want to take advantage of lower lump sum rates (e.g. 8.5%), we help in the proper analysis of the B2B contract, prepare an opinion for the Central Statistical Office and an application for an interpretation to the KIS, and indicate the necessary changes to the CEIDG.
If you have questions about applying the lump sum, visit www.outsourced.pl .
