Data processing tax rate. Recently, a lump sum as a form of PIT settlement has become a tempting alternative for many entrepreneurs, especially from the IT industry. There is a widespread belief that if services have any connection with the IT industry, they are taxed at a 12% rate (and some may be even at 8.5%). This belief may be wrong, especially in the case of people who process data or work with data.
Lump-sum of taxation
In a nutshell – a lump sum is a simplified form of settling income tax, characterized by a high degree of informality and, in principle, no possibility of deducting the costs of obtaining income.
Potentially, any type of services provided by natural persons as part of a business activity may be subject to lump-sum of taxation (from 2% to 17% of income tax). There are a number of exclusions and limitations that should be checked, because the use of a lump sum payment requires certain conditions to be met. We have written about this topic before:
Which lump sum rate to choose… ?
The topic of choosing the rate was also discussed in one of our previous entries:
Data processing tax rate
To correctly allocate the lump-sum rate to the income from the services you provide, please refer to the Lump-sum Income Tax Act… (direct link: the act).
12%
Article 12(1) 1 indicates specific lump sum rates, assigning them appropriate types of services/manufacturing activities. This division is made according to a key that is often controversial.
Importantly, this division depends, of course, on the contract we have concluded with the contractor, on the PKD codes we indicate (slightly less) and the invoice we issue, but above all on the activities we actually perform (which the tax office can easily check). So who can apply the 12% flat rate?
Article 12 section 1 point 2b letter b
2b) 12% revenues from the provision of services:
(…)
b) services related to consultancy in the field of computer hardware (PKWiU 62.02.10.0), related to software (PKWiU ex 62.01.1), included in the grouping “Computer software originals” (PKWiU 62.01.2), related to consultancy in the field of software (PKWiU ex 62.02), in the field of software installation (PKWiU ex 62.09.20.0), related to network and IT systems management (PKWiU 62.03.1)” (Article 12(1)(1)(g) of the Flat-Sum Tax Act;
Even after a cursory analysis of the provision, we may come to the conclusion that there are no data processing activities directly indicated here.
15%
Article 12(1) 1 point 2 letter m
2) 15% revenues from the provision of services:
(…)
i) data processing (PKWiU ex 63.11.1), video stream transmission
via the Internet (PKWiU 59.11.25.0),
Therefore, the 15% rate applies to enigmatically named data processing services listed in the PKWiU in grouping 63.11.1. And data processing tax rate?
Data processing tax rate – choosing the appropriate PKWiU
The starting point for the correct selection of the lump sum rate is the proper classification of services provided in accordance with the PKWiU 2008 nomenclature (from 2021, PKWiU2015). Tax regulations directly refer to these classifications, specifying what services will be taxed and how.
The official explanations of the Central Statistical Office regarding the analysis of the descriptions of specific PKWiU codes, which are available at this link, may be helpful when determining PKWiU codes.
The most important thing for data processing is the description for grouping 63.11.11.0. According to which, this grouping includes data processing services, including complete processing and specialized reports of data provided by the client or providing automatic data processing and data entry, including maintaining a database.
In this context, an explanation for the grouping of 62.01.11.0 is also important, an element of which is the design of the structure and content of the database and/or computer code, necessary to create and/or implement a database (data warehouse) (…).
The relationship between these two standards will lead to the correct determination of the lump sum rate! Deciding on the rate is a difficult decision because it obviously affects the amount of our taxes, so we must make it consciously, knowing the consequences!
What if I have doubts?
If you have any doubts regarding the PKWIU classification, you can always ask the Central Statistical Office for a classification symbol. However, the waiting time for an opinion from the Central Statistical Office has recently been extended from one month to even 12 months.
In this respect, we recommend using the services of a tax advisor, because the taxpayer acting alone may easily overlook certain formal aspects, which, unfortunately, may result in further extension of the deadline by the Central Statistical Office.
What if I choose the wrong rate?
Unfortunately, in such a case, the tax office will most likely indicate the appropriate (usually higher) lump sum rate during the audit, which will result in negative consequences for the taxpayer.
Data processing tax rate – how can we help?
We support our clients by verifying the possibility of using a lump sum in their activities and helping them choose the appropriate lump sum rate. In this case, it is usually necessary to analyze the B2B contract and the activities performed. We also prepare appropriate calculations. During individual consultations, we clarify any questions or doubts and discuss the possibilities of reducing tax risks.
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, an application for an interpretation to the National Chamber of Commerce and indicate the changes necessary to make changes to the CEIDG.
If you have any questions about the application of the lump sum, write us!
