Ryczałt (lump-sum tax) is tempting with its simplicity and low tax rates, but a mistake when choosing the rate may mean a significant tax top-up after several years. Our article titled “lump-sum tax checklist” is designed to make you aware of what is worth preparing before you tick the “ryczałt” box in CEIDG. What data to collect, what to analyse, what to ask your tax advisor about, and where the risks lie.
Lump-sum tax checklist – what is all this for?
Ryczałt on recorded revenues (ryczałt od przychodów ewidencjonowanych) is, at first glance, a simple form of taxation: several rates (from 2% to 17%), no tax-deductible costs, simplified records. In practice, it is increasingly often the subject of tax audits – especially in creative industries and IT, where the tax authorities interpret “services related to software” and advisory services very broadly.
For example, in a judgment of 23 August 2024 (II FSK 622/24), the Supreme Administrative Court (NSA) confirmed a broad definition of “activities related to software”, thus stating that many services provided in IT should be treated as “related to software”, and therefore taxed at the 12% rate, even if the taxpayer does not actually do the programming. Decisions of this type mean that a safe choice of the lump-sum tax rate today requires much more than “intuition” or picking the first PKD code that seems to fit.
That is why we have prepared a practical lump-sum tax checklist – a list of information and documents worth having at hand before we start analysing the rate.
We wrote more about the advantages and disadvantages of ryczałt in the article:
Lump-sum tax checklist
Step 1. Check whether you are allowed to use ryczałt at all
Before we move on to the rates, we need to answer a basic question: are you even allowed to use ryczałt?
The Act on Lump-Sum Income Tax on Certain Revenues Earned by Natural Persons provides, among other things:
- a revenue limit – as a rule, EUR 2,000,000 of revenues from business activity in the previous year (Article 6(4)),
- a catalogue of exclusions – e.g. trade in parts and accessories for motor vehicles (Article 8 of the Act),
- special rules for persons cooperating with their former or current employer.
To prepare at this stage:
- information on the amount of revenues from business activity in the previous year (and expected revenues in the current year),
- information on your current form of taxation (progressive scale, 19% flat tax, lump-sum tax),
- information whether you provide services or sell goods to your current or former employer – and, if so, in what scope,
- a short description of the type of activity (e.g. car parts trading, medical activity, pharmacy etc.).
If you cooperate B2B with your (former) employer, it is also worth looking at our article:
Step 2. Description of services and documents
The lump-sum tax rate depends on the activities you actually perform, not on your job title. We have emphasised this many times in our analyses for the IT sector (e.g. product owners, UX/UI designers or data processing).
For the purposes of our lump-sum tax checklist, the most important thing is a reliable description of what you really do. This is the starting point both for assigning a PKWiU code and for choosing the rate under Article 12 of the Act.
The key questions we ask clients to answer (in their own words) are:
- What exactly do you do or what services will you be providing? What is the purpose of these services and what activities do you perform in practice?
- Do you work for one main client (e.g. a limited liability company) or for several clients?
- Do you have a draft B2B contract (or a signed agreement) already? How are your duties, tasks and responsibilities described in the contract?
- Do you prepare reports, protocols, documentation, sprints, tickets, test cases, timelines, or is your billing rather hourly/flat-fee without formal reports?
To prepare at this stage:
- a short description of your services (2–3 paragraphs in plain language),
- the current or planned B2B agreement,
- sample reports, tickets, project documentation or other materials showing what you actually do.
We discuss this issue using IT examples, among others, in the following articles:
or here:
Step 3. PKD, PKWiU and the Act – how to get to the lump-sum tax rate
We then translate the description of services into the language of statistical classifications and tax provisions.
- PKD – shows the general profile of the activity (useful, but rarely decisive for the rate).
- PKWiU – is the key to lump-sum rates. The Act on Lump-Sum Income Tax refers in Article 12(1) to specific PKWiU groupings (e.g. 62.01.1 – services related to software, 63.11.1 – data processing, 74.1 – specialised design).
- Article 12 of the Act – assigns the rates of 8.5%, 12%, 14%, 15% (and others) to particular types of services, often described in very general terms.
The problem is that the boundaries between these groupings are often blurry, and the tax authorities – including KIS – consistently push many services into higher-rate categories. The NSA judgment of 23 August 2024 (II FSK 622/24) mentioned above showed that a broad understanding of services “related to software” may also cover analyses, maintenance and development of systems, and not only programming itself.
In addition, there is an ongoing and planned change in the PKWiU classification:
To prepare at this stage:
- a list of current PKD codes entered in CEIDG,
- if you have them – any existing GUS opinions on PKWiU and KIS individual rulings,
- information whether you plan to change your service profile (e.g. move from “pure IT” towards project management, business consulting, marketing).
We described the topic “what lump-sum tax rate?” and the difficulties created by KIS in more detail in the article:
Step 4. Your personal situation and other income – is ryczałt really beneficial?
Ryczałt is not only about the rate from Article 12 – it is the whole picture of your tax situation. In practice it often turns out, for example, that:
- with high business costs, the 19% flat tax may be more beneficial,
- if you plan to file jointly with your spouse or use family-related tax reliefs, ryczałt may be disadvantageous.
Therefore, in our lump-sum tax checklist we also include questions about:
- other sources of income (employment contract, mandate contract, private rental, foreign income),
- family situation (spouse, children, planned use of PIT reliefs),
- planned investments (e.g. purchase of a flat, mortgage, future reliefs).
We show more on how the choice of taxation form impacts reliefs and the annual return in our materials on tax reliefs and annual settlements on the Outsourced.pl blog:
Lump-sum tax checklist – how we can help
Based on the above checklist, you will be able to choose an appropriate and safe lump-sum tax rate either on your own or with our support. If we work together, a well-prepared lump-sum tax checklist saves time for both sides. You have the feeling that you have not missed anything important, and the tax advisor can focus on analysing provisions, interpretations and case law instead of chasing basic information.
If you are facing the choice of taxation form, are thinking about switching to ryczałt, or have doubts whether the rate you currently apply is correct, feel free to contact us. On the basis of this checklist we will prepare a concrete action plan for you – step by step.
