Entrepreneurs in Poland can choose from three primary tax regimes for their business income: the standard progressive tax scale, a flat-rate tax, and a lump-sum tax on recorded revenue. What conditions must an entrepreneur meet to switch from one tax regime to another? Within what timeframes must such a change be made? We provide this information below.

What tax regimes are available to individual entrepreneurs (JDG) in Poland?

These are the three main options, which we also examine in detail in our article.

Here are their general characteristics:

• General (zasady ogólne) – with a progressive tax rate of 12% or 32% applied to the difference between income and expenses;
• Linear (podatek liniowy) – with a flat tax rate of 19% applied to the difference between income and expenses;
• Fixed/Lump-sum (ryczałt od przychodów ewidencjonowanych) – with tax rates ranging from 2% to 17%, depending on the type of business activity, applied solely to income.

When is an entrepreneur entitled to change or select a different tax regime?

Since an individual entrepreneur (sole trader/JDG) in Poland can change their tax regime only once per year, it is crucial to adhere to the established deadlines.

Deadline: An entrepreneur may select a different tax regime no later than the 20th day of the month following the month in which they earned their first business income for the current year.

For example, if the first income of the year is earned in January, the application must be submitted by February 20th (inclusive). If the first income is earned in March, the deadline is April 20th.

How do you submit an application?

A change in tax regime is processed by submitting an application to the tax office. Entrepreneurs can also complete this process online via the "Entrepreneur’s Account" (Konto Przedsiębiorcy) on the Biznes.gov.pl portal.