Revolution in lump-sum taxation from 2027 – the limit reduced eightfold and expansion of the 17% rate (Part 3/3)

September 21, 2026

The third and, in terms of the number of people affected, potentially the most far-reaching part of the 2027 tax package concerns lump-sum taxation on recorded revenue. The current proposal assumes an eightfold reduction of the revenue limit qualifying for this form of taxation, from the current EUR 2 million to EUR 250,000. Additionally, the catalogue of services subject to the 17% rate would be expanded.

Lump-sum taxation on recorded revenue – current position

Lump-sum taxation on recorded revenue is a form of taxation in which tax is calculated on revenue without deducting tax-deductible expenses. The rates vary depending on the type of business activity, ranging from 2% (e.g. sale of agricultural products), through 8.5% (among others, intangible services and property rental up to a threshold), 12% (IT services), 15% (advisory services), up to 17% (selected professional services). Lump-sum taxation is particularly popular in high-margin sectors such as IT, medicine and consultancy.

The revenue threshold qualifying for lump-sum taxation has been increased many times. Historically, it was PLN 400,000. Under the Polish Deal reform of 2022, it was increased to EUR 2 million (approximately PLN 8.6 million at the 2026 exchange rate), signalling that lump-sum taxation was also intended for medium-sized businesses. The legislator now intends to reverse that step.

New EUR 250,000 threshold

Under the proposal, from 2027 only taxpayers whose revenue in the preceding year (i.e. 2026) did not exceed the equivalent of EUR 250,000 will be entitled to use lump-sum taxation. Taxpayers whose 2026 revenue exceeds this amount will lose the right to this form of taxation from 1 January 2027 and will be required to choose another method: the progressive tax scale or flat-rate PIT.

The effects of this change may be particularly severe for:

• IT specialists (software developers, system architects and consultants) taxed at the 12% lump-sum rate, many of whom generate revenue significantly exceeding PLN 1 million per year.
• Doctors, dentists and other medical specialists conducting private practices and taxed at the 14% lump-sum rate.
• Lawyers, tax advisers and other professionals using this form of taxation.

The 17% rate – a trap for those exceeding EUR 300,000

The draft introduces an additional mechanism: a 17% rate applicable to revenue exceeding EUR 300,000 generated during the year. Under this mechanism, a taxpayer uses the standard rate applicable to their services (e.g. 12% for IT) until cumulative annual revenue exceeds EUR 300,000. From that point onward, every additional zloty earned, regardless of the type of service, is taxed at 17%.

The EUR 250,000 and EUR 300,000 thresholds serve different purposes:

• EUR 250,000: eligibility criterion for lump-sum taxation in the following year, based on revenue from the previous year;
• EUR 300,000: in-year threshold, after which the 17% rate applies.

Thus, if a taxpayer generated revenue below EUR 250,000 in 2026 and may therefore use lump-sum taxation in 2027, but subsequently exceeds EUR 300,000 during 2027, the excess will be taxed at 17%, while revenue up to EUR 300,000 will remain subject to the standard applicable rate.

What options are available to taxpayers who lose the right to lump-sum taxation?

Taxpayers exceeding the new EUR 250,000 threshold in 2026 will need to choose a new tax regime. The main options are:

• Progressive tax scale (12%/24%/32% from 2027): Advantages include the ability to deduct all tax-deductible costs, file jointly with a spouse, and use numerous tax reliefs and deductions. The disadvantage is tax progression and potentially high rates for higher incomes. For specialists with high revenue and low costs (e.g. consultants), taxable income may be only slightly lower than revenue, resulting in an effective tax rate close to the highest bracket.
• Flat-rate tax (19%): A fixed 19% rate on income, without the possibility of joint filing with a spouse and without most tax reliefs. Attractive for taxpayers with high incomes that would otherwise be taxed at higher progressive rates. Health insurance contributions for taxpayers using the flat-rate tax may be deducted from income up to approximately PLN 14,000 annually.
• Transformation (e.g. into a limited liability company or limited partnership): Transferring business activities into a limited liability company allows use of a 9% CIT rate (up to EUR 2 million turnover) or the standard 19% rate. However, this results in double taxation upon profit distribution (CIT plus PIT on dividends). Double taxation may be mitigated through the limited partner deduction mechanism in a limited partnership structure.

Legislative outlook and risks

The draft is at the consultation stage and there is no certainty that it will be submitted to the Sejm and enacted in its announced form. The history of Polish tax legislation shows that such fundamental changes often encounter strong opposition from affected industries and are frequently amended or softened during parliamentary work. The IT, medical and legal sectors are already mobilising to participate actively in the consultation process.

For entrepreneurs, however, one principle is key: even if there is no certainty that the draft will pass in its current form, planning for the most adverse scenario and preparing the legal and tax structure in advance is a safer strategy than waiting until the last moment. Preparations for potential changes can usually be reversed, whereas a lack of preparation for new rules may prove costly.

Tags business activity, działalność gospodarcza, lump sum, podatek, tax