Will the proposed lump-sum tax changes affect only Poland’s highest-earning entrepreneurs? No. Reducing the revenue threshold from EUR 2 million to EUR 250,000 could also affect smaller businesses with high turnover but low profit margins. I discussed the consequences of this proposal in an interview with Money.pl.
Lump-sum tax changes – who could be affected?
The Polish Ministry of Finance has announced a reduction in the revenue threshold for the lump-sum tax on registered revenue. The current threshold of EUR 2 million would be replaced with a limit of EUR 250,000. The proposed changes differ from those we described some time ago:
At first glance, the proposed lump-sum tax changes may appear to concern primarily highly paid IT specialists, software developers or doctors. However, the problem is broader because the lump-sum tax is charged on revenue rather than income.
As dr Piotr Sekulski, tax advisor and founder of Outsourced.pl, explained in his interview with Money.pl:
“However, no one is talking about the fact that the reduced threshold will also affect sectors with high turnover and low profit margins. I mean, among others, small shopkeepers and traders who currently pay a 3% tax. Despite high turnover – and therefore high revenue – the actual income left in the pockets of such entrepreneurs may be modest because of low margins.”
This problem may affect not only retailers but also restaurants, transport companies and certain construction businesses. High turnover does not always mean high profits, so a revenue-based threshold may also exclude relatively small businesses from lump-sum taxation.
Lump-sum tax changes as part of a broader shift
Reducing the threshold may also represent a change in the government’s overall approach to lump-sum taxation. In recent years, this tax regime has been presented as a simple and widely available solution for entrepreneurs. The new proposal would significantly narrow the group entitled to use it.
In the Money.pl article, dr Piotr Sekulski noted:
“I see these proposals as an attempt to change the approach to lump-sum taxation. The Ministry of Finance is moving away from the idea of simple taxation available to everyone, which is convenient for entrepreneurs but is also useful for the tax authorities. This may be part of a broader systemic change. It is also worth recalling that, quite recently, at the end of July this year, the same Ministry of Finance withdrew many of its other proposals concerning lump-sum taxpayers.”
If the proposal is enacted, many entrepreneurs will need to compare lump-sum taxation, the 19% flat-rate personal income tax and the progressive tax scale again. The correct choice will depend not only on the applicable tax rates but also on operating costs, profitability and health insurance contributions.
The proposed rules are intended to apply from 2027. At the time the Money.pl article was published, no draft legislation had yet been presented, so the final scope of the changes may still evolve.
The full article, including comments from dr Piotr Sekulski, is available on Money.pl.
How can we help?
At Outsourced.pl, we analyse the impact of proposed lump-sum tax changes, compare the available Polish tax regimes and prepare individual calculations for entrepreneurs. Our assessment considers not only revenue but also costs, profit margins, health insurance contributions and future business plans.
