Conditions to meet in order to run an unregistered business
May 27, 2025
According to the provisions of the Entrepreneurs’ Law Act, a business activity is defined as an organised, profit-oriented activity conducted in one’s own name and on a continuous basis. An entrepreneur, in turn, is, among others, a person conducting such business activity.
Business activity — is registration mandatory?
Generally, running a business requires appropriate registration with the Central Registration and Information on Business (CEIDG). However, it’s important to note that under certain conditions, this obligation does not apply in every case.
Conditions for using unregistered business activity
The Entrepreneurs’ Law Act provides for the concept of unregistered activity, which means it is possible to operate without registration as long as monthly revenues do not exceed 75% of the minimum wage.
- In 2025, this limit amounts to PLN 3,499.50.
- The second condition is that the individual must not have conducted a registered business activity in the past 5 years.
When does the obligation to register a business arise?
So, if a small entrepreneur does not exceed the revenue threshold of PLN 3,499.50 in any month and has not operated a registered business in the past 5 years, they are not required to register their activity with CEIDG. It’s worth noting that the limit applies to revenues due in a given month, not necessarily those actually received. A small entrepreneur should maintain a simplified sales record.
Unregistered business activity – what you should know?
Since the activity is unregistered, it means the small entrepreneur does not have the legal status of a business operator. Therefore, is not subject to social or health insurance contributions related to running a business. However, tax obligations do apply, as income from such activity must be reported in the annual tax return.
How to report unregistered business activity in the annual tax return?
The taxable base is income, which means the entrepreneur can deduct costs associated with the activity. This income should be classified as “other sources” of income, and the tax scale applies to it. Therefore, the entrepreneur can benefit from the tax-free amount of PLN 30,000, and income above that amount is taxed at a 12% rate. However, this income is combined with other income taxed under the scale. So, for example, if the person also earns income from an employment contract, the tax is calculated on the total sum of income.
Finally, it is important to note that exceeding the revenue threshold of PLN 3,499.50 obliges the individual to register the business, and as a result, to pay social and health insurance contributions.
