Changes in the lump sum on registered income

Practically every year brings new changes in tax law, and this year was no exception. With the onset of January 1, 2021, two things that had remained essentially unchanged for many years had been modified. Firstly, the revenue limit enabling the use of the flat rate for recorded revenues had increased, and secondly, the limit determining the possibility of making quarterly tax payments was also raised. However, these are not the only aspects affected by the modifications in income tax law. Business owners will also have reasons to rejoice as many more companies will be eligible to use the flat rate for recorded revenues than before.

Flat rate for recorded revenues - what are the changes in this type of taxation?

As mentioned earlier, the income limit earned in the previous year, which was a necessary condition for using this type of taxation, has been changed. Previously, this amount was 250,000 euros. As of January 1, 2021, it has increased eightfold, to 2 million euros. Until now, the option to pay taxes quarterly in a given tax year was available only to taxpayers who earned income in the previous tax year, either by conducting their own business or being in a partnership, and the income did not exceed 25,000 euros. This limit has also been increased and now stands at 200,000 euros, eight times more than before.

To convert both of the above amounts to Polish zloty, it is necessary, according to the law, to use the exchange rate from October 1 of the previous year, which is 1 euro = 4.1513 PLN in 2020. From this, it follows that taxpayers can benefit from the flat rate for recorded revenues if they did not exceed the amount of 9,030,600 PLN in 2020. Individuals who want to pay this tax quarterly could not exceed an income amount of 903,060 PLN.

Expanded list of professions eligible for this type of taxation

Starting in 2021, the list of professions eligible for the flat rate for recorded revenues includes:

• Nurses, doctors, dentists, veterinarians, midwives, and paramedics
• Physiotherapists, teachers providing hourly lessons, legal advisors, notaries, construction engineers, and insurance agents.