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With the entry into force Polish dealProvisions for taxation of business activity in a lump sum on recorded revenue have been changed.
– offline with lump sum Representatives of many new professions can use it successfully – notes Krzysztof Pulkiewicz of Banqup, a settlement management platform for entrepreneurs. – This is due to the change in the legal definition of the liberal profession. There are eleven flat tax rates – from 2 to 17 percent. It depends on the industry and, in some cases, on the revenue generated.
Reducing the flat rate for IT service providers from 15 to 12 percent may become an important argument for them to change the shape of taxes. In addition, IT services not included in the Flat Rate Act (Section 12(1)(2b)), i.e. manual tests, may be subject to a rate of 8.5%.
According to data collected by the No Fluff Jobs portal, at the end of 2021 there may be about 125,000 registered in Poland. self employed IT professionals.
– I suppose the vast majority of freelance IT professionals would choose a flat rate. However, it is worth analyzing the three settlement options first. Our calculations show that the lump sum certainly pays off for those who earn the most. With a profit of 120 thousand. PLN per year, the most attractive is the settlement of general conditions – comments Krzysztof Pulkiewicz from Banqup.
Lump sum billing also applies healthcare contribution. However, in this respect, aggregate amounts are in an advantageous position as they are not calculated on the basis of actual revenue. The law establishes three annual income thresholds (up to 60,000 PLN, and up to 300,000 and above) and establishes a contribution for each of them in relation to the average annual wage for the previous year – about PLN 3,800, PLN 6,400 or PLN 11,400 each year, respectively .
Bankop experts estimate it Thanks to the change in the form of taxes from a flat rate to a flat rate, programmers’ salaries will increase by at least 10%. An IT specialist earns 180 thousand per year in total PLN and has 12 thousand. PLN costs, settling on a straight line will pay more than 29 thousand. PLN tax. When he chooses a lump sum, he will pay less than 20,000 zlotys. If she bills 240,000 PLN annually, PLN has 24,000. PLN of costs, with a flat tax will return 38 thousand to the tax office. zloty. In a lump sum – 27 thousand. zloty.
although tax rates In the event of a lump sum Generally lower than in the tax metric and flat tax metric, the lack of possibility to deduct costs and take advantage of exemptions means that this is not a win-win solution. The main issue here is the cost of running a business.
The lump sum is profitable for the entrepreneur when his activity is very profitable, so the costs do not exceed 25%. Income – says Krzysztof Pulkiewicz. In industries with high costs, this form of tax would certainly not be the best option. In the field of IT, it will be a rather useful solution.
It should be remembered that the term “IT professionals” is a very broad term. Profits above 10,000 monthly net Instead, they describe more experienced programmers. Meanwhile, up to 20 percent. IT staff in Poland are entry-level professionals who can count on a slightly lower salary – although there are great opportunities on the horizon. Most of the IT companies that we work with as a programming school employ juniors on contract work. For them, freelancing is a less useful and popular option, says Olga Zelent, Country Director at International School of Programming Codecool.
The costs of a freelance developer are usually relatively low. It’s basically the equipment you’re working on, but it’s a one-time cost, and it’s not incurred every month. In addition, costs may also include:
- rent an office or a place in a co-working space,
- Company account retention fee,
- accounting services fees,
- business trips,
- Improving qualifications (courses, training, professional literature), promotion of the company.
- Company promotion.
by flat tax IT professionals deduct costs from the tax base, thereby reducing the amount of tax payable. However, the Polish order eliminated the possibility of deducting health insurance feesSo the actual financial burden with the flat tax increased by 3.65%.
In the case of a lump sum, it will not be possible to settle the costs, but the taxes are lower. Plus a health insurance contribution with an annual income of up to 300,000. PLN less than PLN 6,400 / year. When settling the flat tax, this contribution is paid with an income of about 133 thousand. PLN (with 300 thousand PLN it would be 14700 PLN / year).
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