New Tax limits in Poland for 2024
November 6, 2023
At the beginning of October, many entrepreneurs find out how their future taxes will look in the next year. Why? This is the moment when several tax thresholds are established which will determine the method of settlement with the tax office in the following year. What limits are we talking about? How are they determined? We explain below.
What is the basis for setting the limits?
To calculate many tax limits that will apply in the next tax year, the average euro exchange rate of the National Bank of Poland on the first business day of October is used – this year it will be the exchange rate from October 2nd 2023 which on that day amounted to PLN 4.6091.
It is worth noting that last year the average euro exchange rate used to set these limits was PLN 4.8272. This means that tax limits will be lower in 2024.
Lump sum from recorded revenue
Entrepreneurs who in 2024 will want to make use of rights based on the provisions of the Flat-rate Income Tax Act, cannot exceed PLN 9 218 200 in revenue during 2023.
It is also worth noting that the exchange rate on the first business day of October also has an impact on the right to a quarterly lump sum payment on recorded revenues. This form of lump sum payment will only be available to taxpayers who in 2023 will not achieve revenue greater than PLN 921,820.
IMPORTANT! The aforementioned regulations do not apply to entrepreneurs starting a business – the above limits do not apply.
Quarterly VAT
The VAT Act provides for the possibility of quarterly payment of tax. This right is reserved only for taxpayers whose turnover does not exceed the statutory threshold. To settle VAT in 2024 the limit will be set based on the turnover achieved in 2023, which should not exceed PLN 9,218,000.
Please remember that quarterly tax payments can only be used after 12 months from the date of VAT registration.
9% CIT rate
The right to use the 9% CIT rate in 2023 is also dependent on the average EURO exchange rate from October 2nd 2023.
Let me remind you, that to tax income at a lower CIT rate, gross revenues (including VAT) from the previous year cannot exceed EUR 2 million, and net revenues (excluding VAT) in the tax year cannot exceed EUR 2 million.
Taxpayers whose gross revenue did not exceed PLN 9 218 000 in 2023 will be able to benefit from the 9% CIT tax rate. The net revenue limit is converted at the exchange rate on the first business day of the year. The second value of the limit for 2024 will be known on January 2, 2024.
Full Accounting
In 2023, gaining revenue exceeding PLN 9,218,000 will also result in the obligation to keep full accounting. This regulation applies not only to partners in civil law partnerships, general partnerships or professional partnerships but also to natural persons running sole proprietorships.
Tags CIT, full accounting, lump sum, NBP rate, tax limits 2024, vat
