B2B in 2022

impact of the ‘Polish Deal’ on the taxation of entrepreneurs

The updated draft of Polish new tax regulations, known as ‘Polish Deal’, has been submitted to the Polish Parliament. Changes in relation to the initial version of the project include, inter alia, partial ‘mitigation’ of the health contribution increase for the self-employed persons (B2B). Nevertheless, despite modifications of the regulation, entrepreneurs who pay the 19% flat tax that will still lose out. Additionally, from 2022 social security contributions will surge drastically (an increase of nearly 10%). Therefore, it is worth analyzing and considering other available forms of taxation of entrepreneurs, including lump sum tax. Below we present information about the key changes for entrepreneurs on B2B contracts.

How can we assist individuals on B2B?

  • We will calculate how the “Polish Deal” will affect the level of net salaries of the entrepreneurs.
  • We will support the entrepreneurs in the assessment of the tax consequences of the “Polish Deal” and help them choose the effective form of taxation of income (revenues) from 2022 (tax scale, flat tax, lump sum on revenues).

  • We will analyze the current / future model of cooperation with individuals on B2B in terms of tax risk management (PIT, social security insurance, CIT and VAT), for the company as well as for the entrepreneurs.

Polish Deal – the most important changes for entrepreneurs. Taxation of income with 19% flat tax / tax scale (17/32%)

  • Complete abolition of the possibility to deduct health insurance contributions from the amount of tax due.
  • After the changes, the health insurance contributions will be calculated on the income obtained (less social security contributions paid, if not deducted as cost) and will amount to:
Taxation formTax rateAmount of health insurance
Flat tax19%4,9% of income
Tax scale17%/32%9% of income

The health insurance contribution determined in the above way must not be lower than 9% of the minimum wage. For instance, in 2022 the minimum health insurance contribution will amount to PLN 271.

  • As a result of the changes, there will be a real increase in the tax and contribution burdens for entrepreneurs paying 19% flat PIT, up to the level of 24% of income (or up to 28% – in the case of entrepreneurs subject to additional 4% „solidarity tax”). For entrepreneurs paying taxes according to the tax scale, the burden may amount up to 41% of income (and even up to 45% including the „solidarity tax”).

Taxation of revenues with a lump sum tax rate

  • Complete abolition of the possibility to deduct health insurance contributions from the amount of tax due.
  • In the case of entrepreneurs taxed with a lump sum on revenues, the 9% health insurance contribution would be paid within 3 income thresholds and its amount would be related to the average monthly salary (according to forecasts, the average monthly salary is to be around PLN 5,900 in 2022):
Treshold (revenue) Amount of health insurance contribution
Up to PLN 60 000 9% premium calculated from 60% of the average monthly salary (the monthly premium would be approx. PLN 380).
Between PLN 60 001 and PLN 300 000 9% premium calculated from 100% of the average monthly salary (the monthly premium would be approx. PLN 530).
PLN 300 001 and above 9% premium calculated from 180% of the average monthly salary (the monthly premium would be approx. PLN 950).

Attention! The lump sum on revenues is available to most individuals running their business in the form of sole proprietorship, civil partnership and general partnership of natural persons. The operational income for the previous year must not exceed EUR 2 million (in the case of partnerships, the income of all partners should be taken into account).

The rate of the lump sum tax depends on the nature of services provided. In most cases, the rates vary from 8.5% of revenues to 17% of revenues (17% rate applicable if the services are performed within so-called “professionals”).

In many cases, the lump sum tax on revenues will generate lower tax and contribution burdens than the 19% flat rate or the tax scale.

Example - a comparison of the effects of the Polish Deal on various forms of taxation of economic activity

Annual revenue (PLN) Taxation form Annual net salary in 2022 (PLN) Change from the current level (PLN)
180 000 (15 000 / month) Tax scale 120 800 -5 000
19% flat tax 126 000 -8 700
Lump sum* 134 500 -6 900
240 000 (20 000 / month) Tax scale 156 200 -10 400
19% flat tax 171 700 -11 600
Lump sum* 185 500 -6 900

* 15% of lump sum was assumed.

Feel free to contact us - we will be happy to answer your questions and provide additional information.

Anna Misiak

Partner | Tax advisor
E: anna.misiak@mddp.pl
T: (+48) (22) 376 52 86

Rafał Sidorowicz

Senior Manager | Tax advisor
E: rafal.sidorowicz@mddp.pl
T: (+48) 506 788 582

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