Since the introduction of the Polish Order in Poland, the form of taxation – a lump sum payment on registered income – has become much more popular due to lower tax rates and a fixed contribution to health insurance defined in thresholds. To enable more entrepreneurs to switch to a lump sum payment, the government wants to increase the lump sum payment limit from 2024. What will its size be?
The maximum lump sum payment will increase by 50%
A bill aimed at reducing bureaucracy and legal barriers has appeared in parliament, according to which the government wants to increase the limit on lump sum payments. The current limit is €2 million and in order to remain on the lump sum payment this threshold cannot be exceeded. From 2024, this threshold should be increased to 3 million euros. Thus, if the law allowing the transition to a lump sum payment from 2024 comes into force, the taxpayer will not be able to have income exceeding 3 million euros in 2023.
The lump sum limit is expressed in euros, so it is converted into Polish currency in accordance with the average euro exchange rate announced by the National Bank of Poland and valid on the first working day of October of the year preceding the tax year. Therefore, the limit for companies continuing operations in 2023 is PLN 9,654,000. For 2024, the amount converted into Polish currency is not yet known.
Will there be more people willing to switch to a single tax?
Increasing the limit will clearly expand the options for companies registered as taxpayers with higher incomes to stay on or switch to a lump sum payment. It should also be emphasized that a lump sum payment is a form of taxation that is much easier to regulate, and it is also more beneficial in terms of simplifying the determination of the amount of health insurance premiums, which is still difficult for taxpayers with other forms of taxation.
Are these changes any good? – commentary from the explanatory note to the bill
As the legislator himself points out in the draft law on reducing accounting bureaucracy and legal barriers – “Any simplification of the tax system, which consists, for example, in making the use of simpler forms of taxation more accessible than before, is a desirable and correct step towards taxpayers”.
