New taxation thresholds for 2023
On 3 October 2022 (i.e. the first business day in October), a euro exchange rate was published to be applied in converting certain taxation thresholds applicable in 2023 and expressed in the euro. The rate was 4.8272. The most important regulations referring to that conversion rate are presented below.
Lump-sum tax on certain revenues obtained by individuals
In 2023 eligible for lump-sum tax on recorded revenues are those taxpayers whose revenues in 2022 did not exceed the threshold of EUR 2,000,000, i.e. upon conversion at the rate of 3 October, the threshold is PLN 9,654,400.
On the other hand, eligible for quarterly settlements in 2023 are the taxpayers whose revenues from non-agricultural business activities did not exceed EUR 200,000, i.e. the amount of PLN 965 440.
The small taxpayer in income taxes
The status of small PIT or CIT taxpayer entails numerous benefits and facilitations to the entities who enjoy it. For instance, they are in a position of paying quarterly advance tax payments, or apply a reduced, 9% rate of CIT.
The small taxpayer for the purposes of the PIT Act and CIT Act is an entity whose gross turnover (i.e. including VAT) in the preceding year did exceed the amount of EUR 2,000,000 as converted at the rate in operation on the first business day in October. Thus, in 2023 deemed as small taxpayer will be any business whose revenue in 2022 did not exceed the amount of PLN 9,654,000.
Please also bear in mind that small taxpayers can also make one-off depreciation write-offs on the initial value of the fixed assets classified as groups 3-8, except passenger cars, the total value of such write-off not exceeding an equivalent of EUR 50,000. Hence, converted into the zloty, the total amount of depreciation write-offs may not exceed the amount of PLN 241,000.
9% CIT rate
The preferential CIT rate of 9% is applicable to the taxpayers whose revenues generated in a fiscal year did not exceed an equivalent in the zloty of the amount of EUR 2,000,000 converted at the average rate as announced by the NBP for the first business day of the fiscal year (in the event of a fiscal year coinciding with the calendar year, this will be equivalent to PLN 9,357,000).
However, the above preferential rate may only be applied by the taxpayers who enjoy the status of small taxpayer.
Hence, the preferential 9% rate may be applied in 2023 by:
- the taxpayers whose gross turnover from sales did not exceed PLN 9,654,000, and
- the taxpayers whose net revenue obtained in 2023 will not exceed the product of EUR 2,000,000 and the average NBP euro exchange rate on 2 January 2023, i.e. PLN 9,357,000 (provided that the fiscal year coincides with the calendar year).
Small taxpayer in VAT
The taxpayers enjoying the status of small taxpayer in VAT can elect quarterly VAT settlements in addition to being eligible to the so-called cash-accounting method.
Under the VAT Act, a small taxpayer means an entity whose gross sales (i.e. including VAT) in the preceding year did exceed the amount of EUR 1,200,000 as converted at the rate in operation on the first business day in October of the preceding fiscal year. The turnover threshold for 2023 is thus PLN 5,793,000 (the amount to be rounded up to PLN 1,000).
A revenue and expense ledger may be kept by a taxpayer who satisfies the three conditions:
- taxes are settled on general terms according to the tax scale or flat rate,
- carries out business as a sole trader or as general partnership of individuals, general partnership of individuals and enterprise in inheritance, registered partnership of individuals, professional partnership and enterprise in inheritance,
- his net revenues (i.e. excl. VAT) from the sales of goods, products and financial operations did not exceed in the preceding year the amount of EUR 2,000,000 (converted at the rate in operation on the first business day of October).
Taking the above into account, the businesses whose revenues in 2022 did not exceed PLN 9,654,400 are eligible for simplified accounting in 2023. Exceeding the above threshold entails an obligation to carry out full accounting.
ZUS (Social Security) contributions
Moreover, a projected amount of the minimum salary in 2023 has been announced to be at PLN 6,935. This amounts serves as a basis for the calculation of inter alia the base for social security contributions applicable to businesses making such contributions on the general terms or as part of the so-called ‘Small, i.e. income-dependent, ZUS’. Moreover, the average salary serves to determine certain thresholds applicable to the social security contribution calculation bases for the insured.
It is worth mentioning that the basis for the calculation of pension and disability benefit contributions may not exceed, in a given calendar year, the 30-fold of the projected average salary in the national economy for a given calendar year. In consequence, the limit for the annual amount of base for the calculation of pension and disability benefit contributions is PLN 208,050.
Kinga Duszna, Tax Consultant, ATA Tax Sp. z o.o.
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